Shares of Voya Financial, Inc. VOYA have gained 24.9% in the past year, outperforming the industry’s growth of 18%. The Finance sector and the Zacks S&P 500 composite have gained in the same time frame.
The insurer has a market capitalisation of $6.4 billion. The average volume of shares traded in the last three months was 0.9 million.
Shares of Reinsurance Group of America, Incorporated RGA, Lincoln National Corporation. LNC and Manulife Financial Corp MFC has gained 24%,18% and 28% respectively over the same period of time.
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VOYA Shares Are Undervalued
VOYA’s shares are trading at a discount compared to the Life Insurance industry. Its forward price-to-book value of 0.92X is lower than the industry average of 1.9X, the Finance sector’s 4.06X and the Zacks S&P 500 composite’s 7.71X.
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VOYA’s Growth Projection Encourages
The Zacks Consensus Estimate for 2026 revenues is pegged at $1.4 billion, suggesting 4.1% year-over-year growth. The consensus estimate for earnings per share is currently pinned at $9.81 for 2026, indicating a 10.8% year-over-year increase.
The consensus estimate for 2027 EPS and revenues indicates an increase of 17.1% and 6.6%, respectively, from the corresponding 2026 estimates.
Earnings have grown 8.8% in the past five years, which is better than the industry average of 6.4%. The expected long-term earnings growth rate is 15.1%. The insurer has a solid track record of beating earnings estimates in three of the past four quarters and missing in one, with an average of 13.09%.
VOYA's ROE Has Softened Amid Margin Pressure
Return on equity for the trailing 12 months was 13.9%, which is lower than the industry’s 15.7%. This reflects its efficiency in utilising shareholders’ funds.
ROE has been declining over the last few years. It contracted 260 basis points over the last two years and compares unfavorably with the industry average, as net profit margins have weakened and reduced net income.
Average Target Price for VOYA Suggests Upside
Based on short-term price targets offered by 11 analysts, the average price target for comes to $84.90, representing an increase of 25.7% from the last closing price of $67.
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Factors Acting in Favor of VOYA
Voya’s earnings are driven by solid performance across Retirement, Investment Management and Employee Benefits segments. The Retirement business continues to be the company’s primary earnings engine, supported by strong fee-based revenues, solid spread income and healthy client retention. The contribution from the OneAmerica retirement business adds scale and supports margin expansion.
The Voya Financial and Allianz Global Investors long-term strategic partnership agreement has added scale and diversification to Voya Investment Management and continues to deliver outstanding financial results. This partnership continues to drive growth in Investment Management. Sconset strengthens Voya's industry-leading position in the insurance asset management market, highlighting its proven track record in private fixed income. It deepens its strategic relationship with Allianz, providing another scalable avenue for growth.
Net investment income, a major component of an insurer’s top line, has increased over the past several quarters. This business adds fee-based earnings diversification and strengthens Voya’s long-term asset-gathering potential.
Employee Benefits is improving through pricing discipline, higher alternative investment income, active portfolio management, and tighter risk selection. In Stop Loss, the company emphasizes margin over growth, higher rates, better reserving, and improved claims experience on the newer cohorts.
Operational excellence has been helping the company deploy capital to enhance shareholders’ value. Apart from the expenses slated for wealth management expansion, Voya uses excess capital to buy back shares. This disciplined capital deployment approach remains positive for investors in a volatile market environment.
The company’s capital levels remain strong. In 2025, the company generated more than $0.8 billion of excess capital, which was approximately 76% of after-tax adjusted operating earnings. As of Dec. 31, 2025, the estimated combined RBC ratio was 413%.
Conclusion
Voya’s core businesses remain positioned for long-term growth, high-return, capital-light businesses, a solid market presence with strategic partnerships and acquisitions, and effective capital deployment. However, high financial leverage and operational pressures remain concerns.
Voya Financial should continue to benefit from an impressive dividend history, solid growth projections, strategic acquisitions, and attractive valuations. It is, therefore, wise to hold on to this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Lincoln National Corporation (LNC): Free Stock Analysis Report
Manulife Financial Corp (MFC): Free Stock Analysis Report
Reinsurance Group of America, Incorporated (RGA): Free Stock Analysis Report
Voya Financial, Inc. (VOYA): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).