MGIC Investment (MTG) has wrapped up FY 2025 with Q4 total revenue of US$298.7 million and basic EPS of US$0.76, supported by trailing twelve month revenue of about US$1.2 billion and EPS of US$3.17 that frame the latest quarter in a fuller context. Over the past six reported quarters, revenue has moved in a tight band between US$298.7 million and US$306.6 million, while quarterly EPS has ranged from US$0.73 to US$0.83, giving investors a consistent earnings profile that sits alongside trailing net profit margins that remain high even after a small compression from 64.1% to 62%. With the shares trading at US$26.12, this set of results places sustained profitability and margin resilience at the center of the period’s key takeaways.

See our full analysis for MGIC Investment.

With the headline numbers on the table, the next step is to see how this earnings run rate lines up against the widely followed narratives around MGIC Investment's growth, risk profile, and long term profitability story.

3.2% revenue growth trails wider market

• Over the last 12 months, MGIC's revenue grew about 3.2% per year to around US$1.2b, compared with 10.1% per year for the broader US market, so growth has been positive but slower than many other companies.
• Bears argue slower top line growth and forecast earnings declines of about 4.7% a year over the next three years weaken the story, yet the recent trailing EPS of US$3.17 and net income of about US$738.3 million show the business is still producing substantial profit, which is a different picture to a simple slowdown narrative.
  • Critics highlight that the 3.2% revenue growth rate looks modest next to the market's 10.1%, but the company still turned that into a trailing net profit margin of 62%, which indicates it is converting a large share of revenue into profit.
  • What stands out is that even as forecasts point to a 4.7% annual earnings decline, the last six reported quarters all stayed within a narrow EPS range of roughly US$0.73 to US$0.83. This suggests the recent earnings run rate has been relatively steady rather than volatile.

To see how this steady earnings run rate fits into the bigger long term story that investors are debating, have a look at the full narrative built around these numbers. 📊 Read the full MGIC Investment Consensus Narrative.

Margins ease from 64.1% to 62%

• Trailing net profit margin has moved from 64.1% to 62% over the past year, with trailing twelve month net income of about US$738.3 million on roughly US$1.2b of revenue, so profitability remains high even after that small margin contraction.
• Bears focus on the combination of softer margins and the forecast 4.7% annual earnings decline, but those concerns sit alongside a five year period where earnings grew around 8% per year and the last four quarters all generated quarterly net income between about US$169.3 million and US$192.5 million. This shows profits stayed within a relatively tight band.
  • One tension for the bearish view is that Q4 FY 2025 net income of US$169.3 million is close to the Q4 FY 2024 figure of US$184.7 million, so profit levels have not fallen sharply even as margins have eased.
  • At the same time, the trend from a 64.1% margin to 62% aligns with concerns about some earnings pressure ahead, which is what the forecast 4.7% annual decline is flagging for the next few years.

P/E of 8.2x with 63.4% DCF gap

• MGIC trades on a P/E of 8.2x at a share price of US$26.12, below the peer average of 8.8x and the US diversified financial industry at 15.3x, and also well under the DCF fair value of about US$78.01, which implies the stock is around 63.4% below that DCF estimate.
• A more optimistic angle points to this valuation set up as a potential opportunity, since the current P/E discount and the wide gap to the US$78.01 DCF fair value sit alongside trailing EPS of US$3.17 and TTM revenue of about US$1.2b. That bullish angle has to be weighed against the projected 4.7% annual earnings decline that could limit how quickly any valuation gap closes.
  • Supporters of the optimistic case often highlight that the shares trade materially below both peers and the DCF fair value while the company has generated about US$738.3 million of net income over the last year, which is a sizeable profit pool relative to the current market price.
  • On the other hand, the same data set also includes the expectation of multi year earnings declines, so valuation signals that look inexpensive today might reflect the market already taking those lower future earnings into account.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on MGIC Investment's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

MGIC's slower 3.2% revenue growth, softer margins and expectations of around 4.7% annual earnings declines raise questions about its longer term growth profile.

If you want companies where growth is the main story, use our CTA_SCREENER_LARGE_CAP_HIGH_GROWTH_POTENTIAL to focus on established names with stronger earnings trajectories that address those concerns.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.