Value
8.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.3 |
| P/S | 7.9 |
| EV/EBITDA | 8.2 |
| Fwd P/E | 9.8 |
| PEG | 10.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 6.6x
- ▸PEG: 0.23
- ▸Attractively valued
RDN · Why this verdict
Why Radian Group (RDN) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score6.9/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Radian Group is a high-quality specialty insurance business with a wide economic moat, a perfect four-quarter earnings beat streak, 59% revenue growth, and an elite Rule of 40 score of 79 — but negative price momentum, concentrated exposure to the mortgage insurance segment, and elevated implied volatility of 91% temper the near-term entry case despite strong underlying fundamentals.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Radian has a wide economic moat, an operating margin score of 10 out of 10, a net margin score of 10 out of 10, a Rule of 40 score of 79 (well above the 40 threshold), and a Piotroski F-Score of 8 out of 9 — placing it among the highest-quality businesses in the specialty financial services sector based on these fundamental measures. Quality breakdown | Operating margins remain above 35% and the Piotroski F-Score stays at 7 or above for at least 3 of the next 4 quarters, confirming durable business quality. | →Stable |
| CounterA free cash flow quality score of only 3.9 out of 10 is flagged as a red flag, with only 49% of net income converting to free cash flow — suggesting earnings quality is lower than the income statement alone implies. | ||
Radian has beaten earnings estimates in all four of the last four quarters, with a highly consistent beat pattern — surprises of 2.4%, 4.0%, 6.2%, and 3.6% — indicating the company is systematically delivering slightly above analyst expectations without dramatic swings, a pattern consistent with conservative management guidance. Earnings | Radian continues to beat earnings estimates in at least 3 of the next 4 quarters with consistent positive surprise above 2%. | →Stable |
| CounterThe narrow beat magnitude of 2.4% to 6.2% suggests analysts have largely calibrated to the company's run rate, leaving little room for upside revision catalysts that could drive meaningful multiple expansion. | ||
Radian has one high-concentration risk flag for its mortgage insurance segment, meaning a meaningful portion of its revenue and profit depends on the health of the US residential mortgage market — a cyclically sensitive exposure that could deteriorate materially in a housing downturn or rising default environment. Key risks | Mortgage insurance segment revenue remains stable or grows over the next 12 months, indicating no meaningful increase in default rates or premium compression affecting this concentrated exposure. | →Stable |
| CounterThe US housing market's structural undersupply and persistently high home prices provide a buffer against the type of widespread default scenario that would impair mortgage insurance economics, making this concentration risk more theoretical than near-term. | ||
A momentum score of only 3.9 out of 10 below the minimum threshold of 4.5, combined with falling on-balance volume indicating distribution, means that market participants are currently net sellers of Radian shares despite strong fundamentals — and the data supports waiting for a momentum improvement before initiating a new position. Momentum breakdown | Momentum score rises above 5.0 and on-balance volume returns to accumulation within 12 months, signaling that selling pressure has been absorbed. | →Stable |
| CounterAt a forward price-to-earnings ratio of 6.3x and PEG of 0.22, the stock is attractively valued relative to both its own growth rate and most financial peers — meaning the technical weakness may be an opportunity rather than a warning. | ||
Radian has a wide economic moat, an operating margin score of 10 out of 10, a net margin score of 10 out of 10, a Rule of 40 score of 79 (well above the 40 threshold), and a Piotroski F-Score of 8 out of 9 — placing it among the highest-quality businesses in the specialty financial services sector based on these fundamental measures.
→StableQuality breakdown
- Expectation
- Operating margins remain above 35% and the Piotroski F-Score stays at 7 or above for at least 3 of the next 4 quarters, confirming durable business quality.
CounterA free cash flow quality score of only 3.9 out of 10 is flagged as a red flag, with only 49% of net income converting to free cash flow — suggesting earnings quality is lower than the income statement alone implies.
Radian has beaten earnings estimates in all four of the last four quarters, with a highly consistent beat pattern — surprises of 2.4%, 4.0%, 6.2%, and 3.6% — indicating the company is systematically delivering slightly above analyst expectations without dramatic swings, a pattern consistent with conservative management guidance.
→StableEarnings
- Expectation
- Radian continues to beat earnings estimates in at least 3 of the next 4 quarters with consistent positive surprise above 2%.
CounterThe narrow beat magnitude of 2.4% to 6.2% suggests analysts have largely calibrated to the company's run rate, leaving little room for upside revision catalysts that could drive meaningful multiple expansion.
Radian has one high-concentration risk flag for its mortgage insurance segment, meaning a meaningful portion of its revenue and profit depends on the health of the US residential mortgage market — a cyclically sensitive exposure that could deteriorate materially in a housing downturn or rising default environment.
→StableKey risks
- Expectation
- Mortgage insurance segment revenue remains stable or grows over the next 12 months, indicating no meaningful increase in default rates or premium compression affecting this concentrated exposure.
CounterThe US housing market's structural undersupply and persistently high home prices provide a buffer against the type of widespread default scenario that would impair mortgage insurance economics, making this concentration risk more theoretical than near-term.
A momentum score of only 3.9 out of 10 below the minimum threshold of 4.5, combined with falling on-balance volume indicating distribution, means that market participants are currently net sellers of Radian shares despite strong fundamentals — and the data supports waiting for a momentum improvement before initiating a new position.
→StableMomentum breakdown
- Expectation
- Momentum score rises above 5.0 and on-balance volume returns to accumulation within 12 months, signaling that selling pressure has been absorbed.
CounterAt a forward price-to-earnings ratio of 6.3x and PEG of 0.22, the stock is attractively valued relative to both its own growth rate and most financial peers — meaning the technical weakness may be an opportunity rather than a warning.
Per-dimension breakdown
Quality
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.2 |
| ROA | 3.8 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 5.7 |
| FCF quality | 3.9 |
| Moat | 8.4 |
| Rule of 40 | 9.5 |
| Piotroski F | 8.9 |
- ▸Strong margins: 41%
- ▸Earnings quality RED FLAG: 49% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
8.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 7.7 |
- ▸Strong growth: 59% YoY
Momentum
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.2 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 77)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 7.3 |
| erm sentiment | 6.1 |
Insider
4.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 6.5 |
| insider conviction | 3.0 |
| holder change | 5.1 |
- ▸Modest insider buying — $2,980,029 (0.061% of mkt cap)
Peer rank
5.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.0 |
| quality rank | 3.5 |
| growth rank | 9.0 |
- ▸Industry growth leader
Technical
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 1.5 |
| 52w position | 9.3 |
Risk (lower is worse)
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.3 |
| days to cover | 7.9 |
| volatility | 7.2 |
| put call | 10.0 |
| implied vol | 6.0 |
| max pain risk | 3.0 |
| beta | 8.6 |
| debt equity | 8.9 |
- ▸Above max pain $33
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 8.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.5 |
| dividend safety | 5.2 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 279.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier +1 (HOLD_IF_HOLDING → STRONG_BUY_WAIT).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=+1Passed (6)
- MOMENTUM:6.6>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:34d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.2<1.5@spot
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.16
Upside
+1.6%
Downside
9.9%
Sizing output
STARTER
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — MCap $4.9B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.6>=5.5. Top dim: Growth at 8.8; weakest: Technical at 3.6. No conviction either direction.
The strongest dimensions are Growth at 8.8, Value at 8.3, and Risk (lower is worse) at 7.5; the weakest are Technical at 3.6, Insider at 4.9, and Peer rank at 5.9. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.16 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Radian has a wide economic moat, an operating margin score of 10 out of 10, a net margin score of 10 out of 10, a Rule of 40 score of 79 (well above the 40 threshold), and a Piotroski F-Score of 8 out of 9 — placing it among the highest-quality businesses in the specialty financial services sector based on these fundamental measures.
Trip ifOperating margin falls below 30% in any single quarter, indicating a structural compression in the core insurance economics.
- P2Radian has beaten earnings estimates in all four of the last four quarters, with a highly consistent beat pattern — surprises of 2.4%, 4.0%, 6.2%, and 3.6% — indicating the company is systematically delivering slightly above analyst expectations without dramatic swings, a pattern consistent with conservative management guidance.
Trip ifEarnings surprise falls below -5% in at least 2 of the next 4 quarters, breaking the perfect beat streak and suggesting the conservative guidance cadence is no longer reliable.
- P3Radian has one high-concentration risk flag for its mortgage insurance segment, meaning a meaningful portion of its revenue and profit depends on the health of the US residential mortgage market — a cyclically sensitive exposure that could deteriorate materially in a housing downturn or rising default environment.
Trip ifMortgage-related credit loss provisions increase by more than 50% quarter-over-quarter in any single period, indicating deterioration in the underlying mortgage portfolio quality.
- P4A momentum score of only 3.9 out of 10 below the minimum threshold of 4.5, combined with falling on-balance volume indicating distribution, means that market participants are currently net sellers of Radian shares despite strong fundamentals — and the data supports waiting for a momentum improvement before initiating a new position.
Trip ifMomentum score remains below 4.0 for more than 3 consecutive months, confirming the technical weakness is persistent and not resolving with fundamental tailwinds.