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Radian Group (RDN): Is the Market Underestimating This Mortgage Insurer’s Valuation?

Simply Wall St · 2d ago

Radian Group (RDN) has quietly outperformed the broader market over the past year, and that steady climb has many investors revisiting this mortgage insurer as a value and income story.

See our latest analysis for Radian Group.

At a share price of $36.67, Radian’s 30 day share price return of 4.65% and robust five year total shareholder return of 116.14% suggest momentum is still slowly building as investors reassess its earnings resilience and income appeal.

If Radian’s steady climb has you rethinking the sector, it is a good moment to explore other fast growing stocks with high insider ownership that could be quietly compounding in the background.

But with earnings still growing, a value score at the high end, and shares trading below analyst and intrinsic estimates, is Radian still an underappreciated bargain, or already pricing in its next leg of growth?

Most Popular Narrative Narrative: 5.2% Undervalued

With Radian Group’s fair value pegged modestly above the last close, the most followed narrative sees a small but notable disconnect in the market’s pricing.

The analysts have a consensus price target of $37.0 for Radian Group based on their expectations of its future earnings growth, profit margins and other risk factors. In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.4 billion, earnings will come to $518.3 million, and it would be trading on a PE ratio of 9.6x, assuming you use a discount rate of 7.8%.

Read the complete narrative.

Want to see what justifies a richer earnings multiple without much growth acceleration, and how steady margins still support a higher fair value? The full narrative lays out the precise revenue, earnings and valuation path that turns today’s price into a calculated opportunity.

Result: Fair Value of $38.67 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the story can change quickly if mortgage origination slows materially or housing affordability worsens, which could pressure first-time buyer demand and insurance volumes.

Find out about the key risks to this Radian Group narrative.

Build Your Own Radian Group Narrative

If you are not fully convinced by this outlook or prefer to test your own assumptions against the numbers, you can build a personalized view in minutes: Do it your way.

A great starting point for your Radian Group research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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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.