Why Is Radian (RDN) Up 6.3% Since Last Earnings Report?

A month has gone by since the last earnings report for Radian (RDN). Shares have added about 6.3% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Radian due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Radian Group Inc. before we dive into how investors and analysts have reacted as of late.

Radian Group Q2 Earnings Top Estimates, Premiums Decline Y/Y

Radian Group Inc. reported second-quarter 2025 adjusted operating income of 1.01 per share, which beat the Zacks Consensus Estimate by 8.6%. The bottom remained flat year over year. The results reflected muted premiums, lower persistence, higher default loans and higher expenses.

Quarter in Details

Operating revenues remained flat year over year at $312 million and missed the Zacks Consensus Estimate by 1.5%. Net premiums earned were $237.5 million, down 0.1% year over year. Net investment income decreased 1.4% year over year to $72.7 million. MI New Insurance Written increased 2.9% year over year to $14.3 billion.

Primary mortgage insurance in force increased 1.4% year over year to $276.7 billion. Persistency — the percentage of mortgage insurance in force that remains in the company’s books after a 12-month period — was 84% as of June 30, 2025, and remained flat year over year.

Primary delinquent loans were 22,258 as of June 30, 2025, up 9.7% year over year. Total expenses increased 7.5% year over year to $143 million. The expense ratio was 29.7, which deteriorated 120 basis points (bps) from the year-ago quarter.

Segmental Update

The Mortgage segment reported a year-over-year increase of 0.8% in total revenues to $288.3 million. Net premiums earned by the segment were $233.5 million, down 0.5% year over year. Claims paid were $4 million, which decreased 33.3% year over year. The loss ratio was positive 5.1 compared with negative 0.8 in the year-ago quarter.

The All Other segment reported a year-over-year decrease of 29.6% in total revenues to $27.9 million. Net premiums earned by the segment were $3.9 million, up 37.1% year over year. Net investment income decreased 17.7% year over year to $19.5 million. Adjusted pretax operating loss was $16.4 million, wider than the year-ago loss of $6 million.

Financial Update

As of June 30, 2025, Radian Group had a solid cash balance of $22.1 billion.
The debt-to-capital ratio improved 600 bps to 19.2 from the 2024-end level.

Book value per share, a measure of net worth, climbed 11.9% year over year to $33.2 as of June 30, 2025. In the second quarter, adjusted net operating return on equity was 12.4%, which contracted 120 bps year over year. As of June 30, 2025, Radian Guaranty’s available assets under PMIERs totaled approximately $6 billion, resulting in PMIERs excess available assets of $2 billion.

Share Repurchase and Dividend Update

During the second quarter of 2025, Radian bought back 7 million shares worth $223 million. As of June 30, 2025, Radian Group had two active share repurchase authorizations. The first, set to expire in June 2026, had $113 million remaining. In May 2025, the board approved a second authorization of up to $750 million, which will become effective only after the first is fully used or expires, and is valid through December 2027. The board of directors paid a quarterly dividend of 25.5 cents per share in the second quarter of 2025.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates revision.

The consensus estimate has shifted -5% due to these changes.

VGM Scores

Currently, Radian has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision indicates a downward shift. Interestingly, Radian has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Radian belongs to the Zacks Insurance - Multi line industry. Another stock from the same industry, Principal Financial (PFG), has gained 3.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.

Principal Financial reported revenues of $3.69 billion in the last reported quarter, representing a year-over-year change of -9.4%. EPS of $2.16 for the same period compares with $1.63 a year ago.

Principal Financial is expected to post earnings of $2.17 per share for the current quarter, representing a year-over-year change of +23.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.6%.

Principal Financial has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.

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This article originally published on Zacks Investment Research (zacks.com).

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