Truist analyst Mark Hughes has initiated coverage on Ambac Financial (AMBC, Financial) with a Buy rating and set a price target of $10. According to Hughes, Ambac is positioning itself as a significant contender in the appealing managing general agent brokerage sector. The analyst highlights that the company is now well-equipped to expand its insurance distribution capabilities, especially with plans to divest its legacy business by the latter half of 2025. Hughes conveyed these insights to investors, emphasizing Ambac's growth potential in his research note.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 1 analysts, the average target price for Ambac Financial Group Inc (AMBC, Financial) is $15.00 with a high estimate of $15.00 and a low estimate of $15.00. The average target implies an upside of 111.57% from the current price of $7.09. More detailed estimate data can be found on the Ambac Financial Group Inc (AMBC) Forecast page.
Based on the consensus recommendation from 2 brokerage firms, Ambac Financial Group Inc's (AMBC, Financial) average brokerage recommendation is currently 1.5, indicating "Buy" 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 Ambac Financial Group Inc (AMBC, Financial) in one year is $13.03, suggesting a upside of 83.78% from the current price of $7.09. 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 Ambac Financial Group Inc (AMBC) Summary page.
AMBC Key Business Developments
Release Date: May 13, 2025
- Premiums: $318 million, up 70% from the prior period last year.
- Revenue: $63 million, up 27% from the prior period last year.
- Net Loss from Continuing Operations: $16 million or $0.58 per share.
- Adjusted EBITDA from Continuing Operations: Loss of $1 million.
- Total Expenses from Continuing Operations: $78 million, up from $53 million in the first quarter of 2024.
- Cirrata Revenue: $41 million, up 129% compared to the first quarter of 2024.
- Cirrata Adjusted EBITDA: $12 million on a 29.5% margin.
- Everspan Gross Premiums Written: $87 million, down 10% from the prior year.
- Everspan Loss Ratio: Improved by 880 basis points.
- Everspan Combined Ratio: 102% for the quarter.
- AFG Cash, Investments, and Net Receivables: Approximately $104 million or $2.25 per share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ambac Financial Group Inc (AMBC, Financial) reported a strong start to 2025 with $318 million in premium, up 70% from the previous year.
- The acquisition of Beat significantly contributed to revenue growth, adding over $20 million in the quarter, representing a 40% increase from the prior year.
- Cirrata, a segment of Ambac, generated over $230 million in premium for the quarter, marking a 156% increase.
- Two of the six new MGAs launched in 2024 achieved profitability within the first 12 months, ahead of the typical 18 to 24 months timeline.
- Everspan's loss ratio improved by nearly 9%, indicating better underwriting performance and management of capital allocation.
Negative Points
- Ambac Financial Group Inc (AMBC) reported a net loss from continuing operations of $16 million or $0.58 per share for the first quarter of 2025.
- Organic growth excluding the Beat acquisition faced a 2% contraction due to a pullback in ESL and short-term medical business.
- Everspan's gross premiums written decreased by 10% from the prior year, impacting overall revenue.
- The expense ratio for Everspan increased, resulting in a combined ratio of 102% for the quarter.
- The pending sale of the legacy business is still awaiting regulatory approval, which is outside of Ambac's control and affects their transformation plans.
