Mortgage insurer MGIC Investment (NYSE: MTG) missed Wall Street’s revenue expectations in Q4 CY2025, with sales flat year on year at $298.7 million. Its non-GAAP profit of $0.75 per share was in line with analysts’ consensus estimates.
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MGIC Investment (MTG) Q4 CY2025 Highlights:
- Net Premiums Earned: $236 million (2.2% year-on-year decline)
- Revenue: $298.7 million vs analyst estimates of $307.1 million (flat year on year, 2.8% miss)
- Pre-tax Profit: $212.7 million (71.2% margin)
- Adjusted EPS: $0.75 vs analyst estimates of $0.75 (in line)
- Book Value per Share: $23.47 (12.7% year-on-year growth)
- Market Capitalization: $6.02 billion
Tim Mattke, CEO of MTG and Mortgage Guaranty Insurance Corporation ("MGIC") said, "We closed 2025 on a strong note, once again delivering solid financial results and ending the year with more than $303 billion of insurance in-force.
Company Overview
Founded in 1957 when the modern mortgage insurance industry was in its infancy, MGIC Investment (NYSE: MTG) provides private mortgage insurance that protects lenders when homebuyers default on their loans, enabling borrowers to purchase homes with smaller down payments.
Revenue Growth
Big picture, insurers generate revenue from three key sources. The first is the core business of underwriting policies. The second source is income from investing the “float” (premiums collected upfront not yet paid out as claims) in assets such as fixed-income assets and equities. The third is fees from various sources such as policy administration, annuities, or other value-added services. Unfortunately, MGIC Investment struggled to consistently increase demand as its $1.21 billion of revenue for the trailing 12 months was close to its revenue five years ago. This wasn’t a great result and is a rough starting point for our analysis.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. MGIC Investment’s annualized revenue growth of 2.5% over the last two years is above its five-year trend, but we were still disappointed by the results. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, MGIC Investment missed Wall Street’s estimates and reported a rather uninspiring 0.9% year-on-year revenue decline, generating $298.7 million of revenue.
Net premiums earned made up 82.7% of the company’s total revenue during the last five years, meaning MGIC Investment barely relies on non-insurance activities to drive its overall growth.
Markets consistently prioritize net premiums earned growth over investment and fee income, recognizing its superior quality as a core indicator of the company’s underwriting success and market penetration.
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Book Value Per Share (BVPS)
Insurance companies are balance sheet businesses, collecting premiums upfront and paying out claims over time. The float – premiums collected but not yet paid out – are invested, creating an asset base supported by a liability structure. Book value captures this dynamic by measuring:
- Assets (investment portfolio, cash, reinsurance recoverables) - liabilities (claim reserves, debt, future policy benefits)
BVPS is essentially the residual value for shareholders.
We therefore consider BVPS very important to track for insurers and a metric that sheds light on business quality because it reflects long-term capital growth and is harder to manipulate than more commonly-used metrics like EPS.
MGIC Investment’s BVPS grew at an impressive 11.1% annual clip over the last five years. BVPS growth has also accelerated recently, growing by 12.3% annually over the last two years from $18.61 to $23.47 per share.
Key Takeaways from MGIC Investment’s Q4 Results
We struggled to find many positives in these results. Its revenue missed and its EPS was only in line with Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $27.54 immediately after reporting.
Should you buy the stock or not? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
