Why Did Ambac Financial Plunge 27%?

On April 16, 2025, Ambac Financial experienced a significant drop of 27% in pre-market trading, reflecting a notable decline in investor sentiment.

Ambac Financial Group's EV-to-EBITDA ratio, a key valuation metric, has been a point of concern. As of April 14, 2025, the company's EV-to-EBITDA stands at -22.04, indicating a negative valuation multiple. This figure is significantly lower than the industry median of 7.22, suggesting that Ambac Financial is currently undervalued compared to its peers in the insurance sector.

Historically, Ambac Financial's EV-to-EBITDA has fluctuated widely, with a range from -1128.79 to 102.73 over the past decade. The current ratio of -26.29 places the company in a challenging position, ranking worse than 100% of companies in the insurance industry. This negative valuation multiple is a result of the company's enterprise value of €686.5 million and its EBITDA of -€31.1 million for the trailing twelve months ended in December 2024.

The company's PE Ratio (TTM) is also at a loss, with a share price of €5.85 and earnings per share (diluted) of -€10.199 for the same period. This further underscores the financial challenges faced by Ambac Financial, as investors are wary of the company's ability to generate profits in the near future.