Radian Group Trades Above 50-Day SMA: How to Play the Stock?

Radian Group Inc. RDN has been trading above its 50-day simple moving average (SMA), signaling a short-term bullish trend.

The 50-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important as this is the first marker of an uptrend or downtrend.

RDN Shares Are Affordable

RDN shares are trading at a discount to the industry. Its price-to-book value of 1.05X is lower than the industry average of 2.61X.

The insurer has a market capitalization of $4.7 billion. The average volume of shares traded in the last three months was 1.1 million.

However, shares of other insurers like Lemonade, Inc. LMND,Hippo Holdings Inc. HIPO are trading at a multiple higher than the industry average, while Horace Mann Educators Corporation HMN shares are trading at a discount.

RDN’s Price Performance

Shares of RDNhave gained 9.5% outperforming the industry’s increase of  7.1% in the year-to-date period. The  Finance sector and the Zacks S&P 500 Composite have gained 13.9% and 12.8%, respectively, in the same time frame.

Projections for RDN

The Zacks Consensus Estimate for 2025 revenues is pegged at $1.3 billion, implying a year-over-year improvement of 0.2%. The consensus estimate for RDN’s current-year earnings is pegged at $3.92 per share, down 4.6% from the year-ago reported figure. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 0.4% and 2.6%, respectively, from 2025 estimates.

Average Target Price for RDN Suggests Upside

Based on short-term price targets offered by six analysts, the Zacks average price target is $37 per share. The average indicates a potential 5.3% upside from the last closing price.

Optimistic Analyst Sentiment on RDN

The Zacks Consensus Estimate for 2025 and 2026 earnings has moved up 3.7% and 1.3% in the past 60 days, respectively.

Key Points to Note for RDN

Radian Group is strengthening its mortgage insurance portfolio with an eye on long-term growth. The company is set to benefit from a steady mortgage insurance market, backed by stronger credit quality in newly insured loans and fewer claim payouts. Consistent policy renewals and rising demand for new mortgage insurance continue to push insurance in force higher, laying a solid foundation for future performance.

With the purchase market showing steady momentum, Radian Group sees mortgage insurance playing an increasingly important role in fueling growth. The company continues to lean on its proprietary analytics and RADAR Rates platform, which provides sharper insights and helps capture economic value across its portfolio. These strengths, combined with a well-positioned mortgage insurance base, are expected to secure a reliable earnings stream.

A healthier loan book continues to support Radian Group’s credit profile. The primary default rate eased to 2.3% at mid-2025, down from 2.4% at the close of 2024. Net claims paid rose to $6.9 million year over year, but overall claim activity has been on a steady decline in recent years. With newly insured loans showing stronger credit quality, claims are expected to stay low, reinforcing portfolio stability.

Even with strong fundamentals in place, Radian Group faces a few headwinds. Expenses have edged higher, and its return on equity of 13.25% trails the industry average of 14.8%. In addition, the debt-to-capital ratio stood at 41.52% for the trailing 12 months, above the industry average of 34.16%. These factors highlight some near-term pressure and will remain key metrics to monitor going forward.

Wealth Distribution of RDN

Radian Group continues to emphasize shareholder value creation through disciplined capital deployment. The insurer has increased dividends five times in the last five years, resulting in a five-year annualized growth rate of 18.4%. It has a current payout ratio of 25%. The company's board also approved a share buyback program of $750 million.

Conclusion

Overall, Radian Group’s ability to grow its insurance in force, leveraging advanced analytics and maintaining a healthier loan book, underscores the strength of its organic drivers. The steady improvement in credit quality and declining claim trends further add resilience to its portfolio.

Given its discount valuation, it is better to add this Zacks Rank #2 (Buy) stock to your portfolio. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

Zacks Investment Research