Compared to Estimates, MGIC (MTG) Q2 Earnings: A Look at Key Metrics

Zacks Equity Research
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MGIC Investment (MTG) reported $295.66 million in revenue for the quarter ended June 2023, representing a year-over-year decline of 0.7%. EPS of $0.68 for the same period compares to $0.81 a year ago.

The reported revenue represents a surprise of +0.45% over the Zacks Consensus Estimate of $294.33 million. With the consensus EPS estimate being $0.55, the EPS surprise was +23.64%.

While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.

Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.

Here is how MGIC performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

  • GAAP underwriting expense ratio (insurance operations only): 24.1% versus the two-analyst average estimate of 24.88%.

  • GAAP loss ratio (insurance operations only): -7.3% compared to the 14.49% average estimate based on two analysts.

  • Revenues- Net investment income: $52.34 million versus $45.24 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +29.9% change.

  • Revenues- Net premiums earned: $242.81 million versus the two-analyst average estimate of $246.40 million. The reported number represents a year-over-year change of -5%.

  • Revenues- Other revenue: $0.51 million versus $2.69 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -72.5% change.

View all Key Company Metrics for MGIC here>>>

Shares of MGIC have returned +4.9% over the past month versus the Zacks S&P 500 composite's +3% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term.

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