RADIAN GROUP INC.

Recommendation history

• 2026-06-04BuyBuy: Radian combines a well-capitalized mortgage-insurance franchise with Inigo, a specialty platform targeting mid-80s net combined ratios over time, while both segments are presented as capable of roughly 15% returns on equity. The investment case is strengthened by trading below book value, $1.6 billion of PMIERs excess capital, $3.5 billion of $4.3 billion in mortgage statutory earnings distributed to the holding company since 2021, and substantial buyback capacity; the key tension is that Inigo is entering a softer pricing cycle without providing formal earnings guidance.
• Q1 2026HoldRadian delivered a strong Q1, with adjusted operating EPS of $1.27 (+22% year over year), adjusted operating ROE of 14.7%, book value per share of $35.67 (+10%), and $466 million of revenue (+58%). However, Inigo contributed only two months, management provided no full-year earnings or premium-growth guidance, and specialty pricing is softening; the acquisition thesis needs more proof before adding aggressively. Verdict: hold.
• Q4 2025HoldHold: Radian delivered strong standalone execution—2025 net income from continuing operations was $618 million, book value per share rose 13% to $35.29, mortgage insurance in force reached a record $283 billion, and NIW grew 6%—but the $1.7 billion Inigo acquisition is not yet sufficiently underwritten. Management targets roughly $170 million of incremental annual pre-tax income and over 200 basis points of ROE accretion, yet provided no formal Inigo guidance, combined-ratio outlook, or completed purchase-accounting detail; the stock needs evidence in Q1 results before becoming a clean buy.
• Q3 2025HoldRadian delivered a strong standalone quarter—$153 million of continuing-operations net income, $1.11 diluted EPS, 13.4% continuing-operations ROE, and a record $281 billion insurance-in-force portfolio—but the $1.7 billion Inigo acquisition pauses buybacks and materially raises execution and capital-allocation risk. The deal could add mid-teen operating EPS accretion and roughly 200 basis points of ROE beginning in year one, but those are management estimates and the strategic transformation remains unproven; the risk/reward supports a hold rather than a clean buy.
• Q2 2025HoldHold: Radian delivered a strong core quarter—$142 million net income, $1.02 diluted EPS, 12.5% ROE, 12% year-over-year book-value-per-share growth, and mortgage insurance in force at a record $277 billion. Credit trends and capital returns are attractive, but the non-core businesses remain volatile and management provided limited visibility on 2026 dividend capacity or a path to breakeven for the broader “all other” segment.
• Q1 2025BuyBuy: Radian delivered $145 million of net income, $0.98 diluted EPS, 12.6% ROE and 11% year-over-year book-value-per-share growth to $32.48, while repurchasing $207 million of stock—more than 4% of shares outstanding—in Q1. The core portfolio remains unusually resilient, with a 2.33% default rate, strong cures and 86% persistency, but the upside depends on continued benign credit and elevated rates as the private MI market remains broadly flat and tariff-related macro risks are unresolved.