MGIC Investment’s fourth quarter saw a negative market response, as revenue came in below analyst expectations and margins compressed compared to the prior year. Management attributed the results to a combination of stagnant new insurance growth and persistent high operating expenses, despite stable credit performance in its insurance portfolio. CEO Timothy James Mattke cited the company’s “disciplined risk management and a thoughtful, measured approach to the market,” while also acknowledging that housing affordability challenges and elevated mortgage rates limited near-term growth opportunities. CFO Nathaniel Howe Colson noted that expense reductions and steady investment income partially offset these pressures.
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MGIC Investment (MTG) Q4 CY2025 Highlights:
- Revenue: $298.7 million vs analyst estimates of $307.1 million (flat year on year, 2.8% miss)
- Adjusted EPS: $0.75 vs analyst estimates of $0.75 (in line)
- Adjusted Operating Income: $212.7 million (71.2% margin, 9.4% year-on-year decline)
- Operating Margin: 71.2%, down from 77.9% in the same quarter last year
- Market Capitalization: $5.99 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From MGIC Investment’s Q4 Earnings Call
- Bose Thomas George (KBW) asked about industry price competition. CEO Timothy James Mattke responded that premium rates were stable and MGIC found “value where we wanted it” without major adjustments this quarter.
- Terry Ma (Barclays) inquired about regional credit trends. CFO Nathaniel Howe Colson stated there was no significant geographic variation in new delinquencies, and no areas of concern had emerged across states or markets.
- Douglas Michael Harter (UBS) questioned vintage-related credit performance. Colson said cure rates by policy year remained within a tight range and recent vintages showed only minor differences, consistent with normalized credit conditions.
- Geoffrey Dunn (Compass) asked about levers for return on capital improvement. Colson pointed to expanded reinsurance as a key driver, enabling better returns at attractive cost and providing regulatory flexibility.
- Mihir Bhatia (Bank of America) queried about the small decline in premium yield. Colson explained it was due to timing effects from increased refinancing activity and expected yield to normalize over time.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) the pace and impact of refinancing activity on new insurance written and policy persistency, (2) further execution on expense reductions and the effect of new reinsurance treaties on profitability, and (3) any shifts in credit quality as new mortgage vintages mature. Developments in housing affordability initiatives and possible regulatory actions around FHA premiums will also be important to monitor.
MGIC Investment currently trades at $27.32, in line with $27.55 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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