A month has gone by since the last earnings report for MGIC Investment (MTG). Shares have added about 2.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is MGIC due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
MGIC Q2 Earnings Beat Estimates, Revenues Miss on Lower Premiums
MGIC Investment Corporation reported second-quarter 2026 operating net income per share of 87 cents, which beat the Zacks Consensus Estimate by 17.6%. The bottom line also improved 6.1% year over year. Total operating revenues declined 2.6% year over year to $298 million, due to lower net premiums earned and net investment income. The top line missed the Zacks Consensus Estimate by 0.3%. The quarterly results reflected strong underwriting performance and lower losses incurred, partially offset by lower premiums and investment income.
MTG's Operational Update
Insurance in force increased 2.6% year over year to $304.8 billion, exceeding the Zacks Consensus Estimate of $297.5 billion and our estimate of $297.5 billion. Meanwhile, primary delinquency increased 7% to 26,152 loans year-over year during the reported quarter. Net premiums earned declined 2.6% year over year to $238.1 million, missing our estimate of $239 million. Meanwhile, net investment income decreased 2.5% year over year to $59.5 million. The figure was in line with our estimate of $59.3 million but below the Zacks Consensus Estimate of $60.7 million.
Persistency, the percentage of insurance remaining in force, was 83.3% as of June 30, 2026, down 140 basis points from the year-ago quarter’s level. Meanwhile, new insurance written increased 8.5% year over year to $17.8 billion.
Underwriting and other expenses, net, declined 12.5% year over year to $45.6 million. However, underwriting performance improved significantly, with the loss ratio declining to 4.6% from 14.1% in the prior quarter. Total losses and expenses increased 12.6% year over year to $65.5 million, attributable to a sharp rise in losses incurred, net.
MTG‘s Financial Update
Book value per share, a measure of net worth, increased 9.8% year over year to $24.27 as of June 30, 2026. Shareholder equity was $5 billion as of June 30, 2026, down 2.6% from the 2025-end level. MGIC Investment's PMIERs Available Assets totaled $5.6 billion, or $2.7 billion above its Minimum Required Assets as of June 30, 2026. Total assets were $6.5 billion as of June 30, 2026, down 1.7% from the 2025-end level. Senior notes totaled $646.9 million as of June 30, 2026, reflecting a 0.1% increase from the 2025-end level.
MTG’s Capital Deployment
The company repurchased 6.6 million shares of common stock for $176.6 million. Mortgage Guaranty Insurance Corporation (MGIC), the insurance subsidiary, paid a $400 million dividend to MGIC Investment Corporation, the holding company. MTG bought back shares worth $42.4 million in July 2026. The board approved a dividend of 17 cents per common share payable on Aug. 20 to shareholders of record on Aug. 5, 2026. Concurrently, the board of directors also approved a share repurchase program, authorizing MTG to repurchase an additional $750 million of common stock through Dec. 31, 2028.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a flat trend in estimates review.
VGM Scores
Currently, MGIC has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock has a grade of B on the value side, putting it in the second quintile for value investors.
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
MGIC has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
MGIC Investment Corporation (MTG): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).