Radian Group
RDN
$37.72
+2.22%
Radian Group Inc. is a leading provider of private mortgage insurance and real estate services, primarily serving the U.S. residential mortgage finance industry. As one of the largest private mortgage insurers in the country, it holds a strong market position by offering credit protection to mortgage lenders and investors. The current investor narrative centers on the company's robust growth trajectory, driven by a strong housing market and expanding mortgage insurance volume, alongside a focus on capital return through dividends and share buybacks. Recent attention has also been drawn to margin expansion and the potential for further earnings growth amid a favorable credit environment.…
RDN
Radian Group
$37.72
RDN 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Radian Group's 12-month outlook, with a consensus price target around $45.00 and implied upside of +19.3% versus the current price.
Average Target
$45.00
0 analysts
Implied Upside
+19.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$39 - $48
Analyst target range
Radian is covered by 5 analysts, with a consensus recommendation of 'Buy' (mean rating 1.8 on a 1-5 scale). The average target price is $45.00, implying an upside of 19.3% from the current price of $37.72. The distribution leans bullish, with no sell ratings and a majority of buy/outperform ratings. Recent upgrades include B of A Securities upgrading from Underperform to Buy in April 2026, and Keefe, Bruyette & Woods maintaining Outperform. The target price range spans from $39.00 (low) to $48.00 (high). The high target of $48.00 assumes continued strong growth and potential multiple expansion, while the low target of $39.00 reflects a more conservative outlook, possibly factoring in a slowdown in the housing market. The spread of $9.00 (23% of the average) indicates moderate uncertainty. The consensus implies confidence in Radian's growth trajectory, supported by recent analyst actions that have been predominantly positive.
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Bulls vs Bears: RDN Investment Factors
Radian presents a compelling risk/reward profile with strong revenue growth, high profitability, and a low valuation. The bull case is supported by accelerating revenue (46.8% YoY), a forward P/E of 6.87x, and analyst upside of 19.3%. However, the stock trades near its 52-week high and is sensitive to housing market cycles and interest rates. The most important tension is whether the strong growth trajectory can persist in a potentially slowing housing market. Currently, the evidence leans bullish given the robust financials and attractive valuation, but investors should monitor housing data and interest rate trends.
Bullish
- Strong Revenue Growth: Revenue surged 46.8% YoY to $466.3M in Q1 2026, driven by higher premium volume in the Mortgage Insurance segment. This acceleration from ~$310M quarterly revenue in 2025 indicates strong demand and market share gains.
- Attractive Valuation: Forward P/E of 6.87x is low relative to the sector, and the PEG ratio of 1.55x suggests reasonable valuation given earnings growth. The average analyst target of $45 implies 19.3% upside from the current price of $37.72.
- Strong Profitability: Net margin of 26.6% and operating margin of 37.2% in Q1 2026 demonstrate excellent cost control and high-margin insurance operations. ROE of 12.2% reflects efficient use of equity capital.
- Healthy Balance Sheet: Debt-to-equity of 0.24 and current ratio of 4.28 indicate low leverage and ample liquidity. Free cash flow of $333.2M TTM supports dividends (yield 2.9%) and share buybacks.
Bearish
- Cyclical Housing Market Risk: Radian's business is tied to the U.S. housing market. A downturn in home prices or rising mortgage delinquencies could reduce demand for mortgage insurance and increase claims, pressuring earnings.
- Near 52-Week High: At $37.72, the stock is at 91.9% of its 52-week high of $41.05. This limits near-term upside and increases vulnerability to profit-taking or negative news.
- Low Historical P/E Ceiling: The trailing P/E of 8.61x is near the upper end of its 5-year range (3.95x-9.09x). Multiple expansion potential is limited unless earnings growth accelerates further.
- Interest Rate Sensitivity: Higher interest rates can dampen mortgage origination volumes, reducing demand for new insurance policies. While the Fed may cut rates, uncertainty remains a headwind.
RDN Technical Analysis
Radian's stock is in a sustained uptrend, with a 1-year price change of +12.03%, outperforming the broader market's 1-year return of 20.92% on a relative basis. The current price of $37.72 sits at 91.9% of its 52-week range (low $31.50, high $41.05), indicating the stock is near the upper end of its range, suggesting strong momentum but also potential overextension. This positioning near highs typically reflects positive investor sentiment and a belief in continued growth. Short-term momentum is accelerating, with a 1-month price change of +9.21% and a 3-month change of +9.30%, both outpacing the S&P 500's respective gains of 0.6% and 6.29%. The 1-month relative strength of +8.61% confirms near-term outperformance. This acceleration aligns with the longer-term uptrend, reinforcing a bullish outlook without signs of divergence. Key support lies at the 52-week low of $31.50, while resistance is at the 52-week high of $41.05. A breakout above $41.05 would signal a continuation of the uptrend, potentially targeting new highs. Conversely, a breakdown below $31.50 could indicate a trend reversal. With a beta of 0.718, Radian is less volatile than the market, offering a defensive characteristic that may appeal to risk-averse investors.
Beta
0.72
0.72x market volatility
Max Drawdown
-14.9%
Largest decline past year
52-Week Range
$32-$41
Price range past year
Annual Return
+12.0%
Cumulative gain past year
| Period | RDN Return | S&P 500 |
|---|---|---|
| 1m | +9.2% | +0.6% |
| 3m | +9.3% | +6.3% |
| 6m | +13.9% | +9.1% |
| 1y | +12.0% | +20.9% |
| ytd | +5.0% | +10.7% |
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RDN Fundamental Analysis
Revenue is growing strongly, with the most recent quarter (Q1 2026) reporting $466.3 million, a 46.8% year-over-year increase. This marks a significant acceleration from prior quarters, where revenue ranged from $301 million to $321 million in 2025. The Mortgage Insurance segment, which generated $348.9 million in the latest quarter, is the primary growth driver, benefiting from higher premium volume and favorable credit conditions. The robust growth trajectory supports a bullish investment case, as it indicates strong demand for mortgage insurance and effective execution. Profitability is excellent, with net income of $124.1 million in Q1 2026 and a net margin of 26.6%. Gross margin stands at 76.9%, reflecting the high-margin nature of the insurance business. Operating margin of 37.2% is strong and has been stable, indicating efficient cost management. The company is consistently profitable, with net income growing from $141.8 million in Q2 2025 to $155 million in Q4 2025, before the Q1 2026 figure. The balance sheet is healthy, with a debt-to-equity ratio of 0.24 and a current ratio of 4.28, indicating ample liquidity. Free cash flow for the trailing twelve months is $333.2 million, demonstrating strong cash generation. Return on equity (ROE) is 12.2%, reflecting efficient use of shareholder capital. The company's financial strength supports its ability to fund growth internally and return capital to shareholders.
Quarterly Revenue
$466337000.0B
2026-03
Revenue YoY Growth
+46.8%
YoY Comparison
Gross Margin
76.9%
Latest Quarter
Free Cash Flow
$333211000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is RDN Overvalued?
Since net income is positive, the primary valuation metric is the P/E ratio. The trailing P/E is 8.61x, while the forward P/E is 6.87x, indicating that the market expects earnings growth. The gap between trailing and forward P/E suggests an anticipated increase in earnings, which aligns with the strong revenue growth. Compared to the industry average (not provided), Radian's P/E appears low, but given the specialty insurance sector, a P/E below 10x is typical for mortgage insurers. The PEG ratio of 1.55x suggests the stock is reasonably valued relative to its growth rate. Historically, Radian's trailing P/E has ranged from 3.95x (Q3 2022) to 9.09x (Q1 2026). The current 8.61x is near the upper end of this range, indicating that the market is pricing in optimistic expectations. However, given the strong earnings growth, this premium may be justified. The price-to-book ratio of 1.04x is close to its historical average, suggesting the stock is fairly valued on a book value basis.
PE
8.6x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 4x~9x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
7.0x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Radian's financials are strong, but the company is exposed to credit risk from its mortgage insurance portfolio. A rise in mortgage delinquencies could increase claims and reduce net income. The debt-to-equity ratio of 0.24 is low, but the company has $20.6M in quarterly interest expense, which is manageable. Revenue concentration in the Mortgage Insurance segment (75% of total) means any disruption in that market could significantly impact earnings. The net margin of 26.6% is healthy, but it could compress if loss ratios increase.
Market & Competitive Risks: The stock's beta of 0.718 indicates lower market correlation, but it is still sensitive to housing market conditions. Valuation compression is a risk if the housing market slows; the trailing P/E of 8.61x is near the high end of its historical range. Competition from other mortgage insurers like MGIC and Essent could pressure pricing. Regulatory changes, such as lower loan limits or changes to GSEs, could reduce demand. The recent upgrade from BofA is positive, but any negative housing data could reverse sentiment.
Worst-Case Scenario: A severe housing downturn with rising unemployment could lead to higher mortgage defaults, causing Radian to incur significant claims. This could result in earnings declines and a drop in the stock to the 52-week low of $31.50, representing a 16.5% loss from the current price. In a more extreme scenario, the stock could fall to $28 (based on historical low P/E of 4x applied to depressed earnings), a 25.8% decline. The max drawdown over the past year was -14.93%, indicating that a 15-20% decline is plausible in a bear case.
