Radian Group Inc. (RDN, Financial) reported its first-quarter revenue at $318 million, slightly down from $319 million in the same period last year. The company demonstrated a strong performance with a net income of $145 million, resulting in a 12.6% return on equity. Additionally, Radian's book value per share saw an 11% increase compared to the previous year. The firm’s primary mortgage insurance in force, which is a key contributor to its future profitability, stood at $274 billion.
In line with its commitment to returning capital to shareholders, Radian capitalized on favorable market conditions by repurchasing $207 million worth of shares, which amounted to over 4% of the total shares outstanding. Including dividends, the total capital returned to shareholders reached $244 million during the quarter.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for Radian Group Inc (RDN, Financial) is $36.00 with a high estimate of $40.00 and a low estimate of $34.00. The average target implies an upside of 12.71% from the current price of $31.94. More detailed estimate data can be found on the Radian Group Inc (RDN) Forecast page.
Based on the consensus recommendation from 6 brokerage firms, Radian Group Inc's (RDN, Financial) average brokerage recommendation is currently 2.8, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Radian Group Inc (RDN, Financial) in one year is $22.63, suggesting a downside of 29.15% from the current price of $31.94. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Radian Group Inc (RDN) Summary page.
RDN Key Business Developments
Release Date: February 06, 2025
- Net Income: $148 million for Q4 2024; $604 million for the full year.
- Earnings Per Share (EPS): $0.98 per diluted share for Q4 2024; $3.92 for the full year.
- Adjusted Diluted Net Operating Income Per Share: $1.09 for Q4 2024; $4.11 for the full year.
- Return on Equity (ROE): 13.4% for the full year 2024.
- Book Value Per Share: Increased by 9% year-over-year to $31.33.
- Total Revenues: $316 million for Q4 2024; $1.3 billion for the full year, a 4% increase from 2023.
- Net Premiums Earned: $235 million for Q4 2024; $939 million for the full year, a 3% increase from the prior year.
- Primary Mortgage Insurance In Force: Reached an all-time high of $275 billion, a 2% year-over-year growth.
- New Insurance Written (NIW): $52 billion for 2024; $13.2 billion in Q4 2024, a 24% increase compared to Q4 2023.
- Persistency Rate: 83.6% in Q4 2024.
- Investment Portfolio: $6.5 billion, generating $71 million in net investment income for Q4 2024.
- Operating Expenses: $88 million for Q4 2024; $348 million for the full year, with an 8% reduction year-over-year excluding impairments.
- Capital Returned to Shareholders: $376 million in 2024 through share repurchases and dividends.
- Available Holding Company Liquidity: $885 million at the end of 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Radian Group Inc (RDN, Financial) reported a 9% year-over-year increase in book value per share, generating a net income of $604 million and a return on equity of 13.4%.
- The company's primary mortgage insurance in force reached an all-time high of $275 billion, indicating strong future earnings potential.
- Radian Group Inc (RDN) returned $376 million of capital to stockholders through share repurchases and dividends, demonstrating a commitment to shareholder value.
- The company exceeded its initial guidance by paying $675 million in ordinary dividends to Radian Group, showcasing strong financial performance.
- Radian Group Inc (RDN) maintained a strong capital and liquidity position with a PMIERs cushion of $2.2 billion and available holding company liquidity of $885 million at the end of 2024.
Negative Points
- The net investment income decreased due to the use of $450 million in cash to redeem senior notes, reducing financial leverage.
- The ending default inventory for 2024 increased to approximately 24,000 loans, resulting in a portfolio default rate of 2.44%, up from 2.20% at year-end 2023.
- Operating expenses included $13 million related to impairments to internal use software and lease-related assets, impacting overall expenses.
- The company's provision for losses and related credit trends showed an increase in new defaults, reflecting normal seasonal trends and the seasoning of the insurance in-force portfolio.
- Radian Group Inc (RDN) faced challenges in its Homegenius business, leading to restructuring and impairments, indicating operational difficulties in that segment.
