Mortgage insurer MGIC Investment (NYSE: MTG) missed Wall Street’s revenue expectations in Q3 CY2025, with sales flat year on year at $304.5 million. Its non-GAAP profit of $0.83 per share was 12.2% above analysts’ consensus estimates.

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Tim Mattke, CEO of MTG and Mortgage Guaranty Insurance Corporation ("MGIC") said, "I am pleased to report another quarter of strong financial results, underscoring the durability of our business model and the effectiveness of our risk and capital management strategies.

Company Overview

Founded in 1957 when the modern mortgage insurance industry was in its infancy, MGIC Investment (NYSE: MTG) provides private mortgage insurance that protects lenders when homebuyers default on their loans, enabling borrowers to purchase homes with smaller down payments.

Revenue Growth

Insurance companies generate revenue three ways. The first is the core insurance business itself, represented in the income statement as premiums earned. The second source is investment income from investing the “float” (premiums collected but not yet paid out as claims) in assets such as fixed-income assets and equities. The third is fees from policy administration, annuities, and other value-added services. Unfortunately, MGIC Investment struggled to consistently increase demand as its $1.22 billion of revenue for the trailing 12 months was close to its revenue five years ago. This wasn’t a great result and suggests it’s a lower quality business.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. MGIC Investment’s annualized revenue growth of 2.3% over the last two years is above its five-year trend, but we were still disappointed by the results. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, MGIC Investment missed Wall Street’s estimates and reported a rather uninspiring 0.7% year-on-year revenue decline, generating $304.5 million of revenue.

Net premiums earned made up 83.1% of the company’s total revenue during the last five years, meaning MGIC Investment barely relies on non-insurance activities to drive its overall growth.

While insurers generate revenue from multiple sources, investors view net premiums earned as the cornerstone - its direct link to core operations stands in sharp contrast to the unpredictability of investment returns and fees.

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Book Value Per Share (BVPS)

Insurers are balance sheet businesses, collecting premiums upfront and paying out claims over time. Premiums collected but not yet paid out, often referred to as the float, are invested and create an asset base supported by a liability structure. Book value per share (BVPS) captures this dynamic by measuring these assets (investment portfolio, cash, reinsurance recoverables) less liabilities (claim reserves, debt, future policy benefits). BVPS is essentially the residual value for shareholders.

We therefore consider BVPS very important to track for insurers and a metric that sheds light on business quality because it reflects long-term capital growth and is harder to manipulate than more commonly-used metrics like EPS.

MGIC Investment’s BVPS grew at an impressive 11.4% annual clip over the last five years. BVPS growth has also accelerated recently, growing by 14.7% annually over the last two years from $17.37 to $22.87 per share.

Key Takeaways from MGIC Investment’s Q3 Results

It was good to see MGIC Investment beat analysts’ EPS expectations this quarter. On the other hand, its revenue slightly missed. Overall, this print was mixed. The stock remained flat at $26.36 immediately following the results.

So should you invest in MGIC Investment right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.