Assured Guaranty (AGO): Buy, Sell, or Hold Post Q1 Earnings?

Over the past six months, Assured Guaranty’s stock price fell to $83.68. Shareholders have lost 11.5% of their capital, which is disappointing considering the S&P 500 has climbed by 5.4%. This may have investors wondering how to approach the situation.

Is there a buying opportunity in Assured Guaranty, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free.

Why Is Assured Guaranty Not Exciting?

Even with the cheaper entry price, we don't have much confidence in Assured Guaranty. Here are three reasons why there are better opportunities than AGO and a stock we'd rather own.

1. Declining Net Premiums Earned Reflects Weakness

Markets consistently prioritize net interest income over non-recurring fees, recognizing its superior quality compared to the more unpredictable revenue streams.

Assured Guaranty’s net premiums earned has declined by 6.2% annually over the last four years, much worse than the broader insurance industry.

2. Revenue Projections Show Stormy Skies Ahead

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect Assured Guaranty’s revenue to drop by 24.2%, a decrease from its 2.8% annualized growth for the past two years. This projection is underwhelming and implies its products and services will face some demand challenges.

3. Previous Growth Initiatives Haven’t Impressed

Return on equity, or ROE, represents the ultimate measure of an insurer's effectiveness, quantifying how well it transforms shareholder investments into profits. Over the long term, insurance companies with robust ROE metrics typically deliver superior shareholder returns through a balanced approach to capital management.

Over the last five years, Assured Guaranty has averaged an ROE of 7.9%, uninspiring for a company operating in a sector where the average shakes out around 12.5%.

Final Judgment

Assured Guaranty’s business quality ultimately falls short of our standards. Following the recent decline, the stock trades at 0.7× forward P/B (or $83.68 per share). While this valuation is optically cheap, the potential downside is big given its shaky fundamentals. We're fairly confident there are better stocks to buy right now. We’d recommend looking at one of Charlie Munger’s all-time favorite businesses.

Stocks We Like More Than Assured Guaranty

Trump’s April 2024 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.