Shares of Radian (RDN) have been strong performers lately, with the stock up 11% over the past month. The stock hit a new 52-week high of $38.9 in the previous session. Radian has gained 5.7% since the start of the year compared to the 6.1% gain for the Zacks Finance sector and the 4.4% return for the Zacks Insurance - Multi line industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 6, 2026, Radian reported EPS of $1.27 versus consensus estimate of $1.17.
For the current fiscal year, Radian is expected to post earnings of $5.17 per share on $2.21 in revenues. This represents a 16.18% change in EPS on a 81.01% change in revenues. For the next fiscal year, the company is expected to earn $5.32 per share on $2.46 in revenues. This represents a year-over-year change of 2.84% and 11.35%, respectively.
Valuation Metrics
Though Radian has recently hit a 52-week high, what is next for Radian? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Radian has a Value Score of A. The stock's Growth and Momentum Scores are D and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 7.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 10.2X. On a trailing cash flow basis, the stock currently trades at 7.7X versus its peer group's average of 10.2X. Additionally, the stock has a PEG ratio of 0.96. This is good enough to put the company in the top echelon of all stocks we cover from a value perspective, making Radian an interesting choice for value investors.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this is even more important than the company's VGM Score. Fortunately, Radian currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Radian meets the list of requirements. Thus, it seems as though Radian shares could have potential in the weeks and months to come.
How Does RDN Stack Up to the Competition?
Shares of RDN have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is TWFG, Inc. (TWFG). TWFG has a Zacks Rank of #2 (Buy) and a Value Score of D, a Growth Score of A, and a Momentum Score of C.
Earnings were strong last quarter. TWFG, Inc. beat our consensus estimate by 45.00%, and for the current fiscal year, TWFG is expected to post earnings of $1.02 per share on revenue of $298.05 million.
Shares of TWFG, Inc. have gained 26% over the past month, and currently trade at a forward P/E of 25.46X and a P/CF of 22.66X.
The Insurance - Multi line industry may rank in the bottom 69% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for RDN and TWFG, even beyond their own solid fundamental situation.
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This article originally published on Zacks Investment Research (zacks.com).