Radian Group Inc.
Radian Group Inc. Fundamental Analysis
Radian Group Inc. (RDN) shows moderate financial fundamentals with a PE ratio of 8.92, profit margin of 40.28%, and ROE of 12.01%. The company generates $1.4B in annual revenue with weak year-over-year growth of -3.36%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 44.8/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze RDN's fundamental strength across five key dimensions:
Efficiency Score
WeakRDN struggles to generate sufficient returns from assets.
Valuation Score
ModerateRDN shows balanced valuation metrics.
Growth Score
WeakRDN faces weak or negative growth trends.
Financial Health Score
ModerateRDN shows balanced financial health with some risks.
Profitability Score
ModerateRDN maintains healthy but balanced margins.
Key Financial Metrics
Is RDN Expensive or Cheap?
P/E Ratio
RDN trades at 8.92 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, RDN's PEG of 2.21 indicates potential overvaluation.
Price to Book
The market values Radian Group Inc. at 1.04 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 4.42 times EBITDA. This is generally considered low.
How Well Does RDN Make Money?
Net Profit Margin
For every $100 in sales, Radian Group Inc. keeps $40.28 as profit after all expenses.
Operating Margin
Core operations generate 53.61 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $12.01 in profit for every $100 of shareholder equity.
ROA
Radian Group Inc. generates $5.28 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Radian Group Inc. produces operating cash flow of $331.76M, showing steady but balanced cash generation.
Free Cash Flow
Radian Group Inc. generates strong free cash flow of $328.08M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $2.43 in free cash annually.
FCF Yield
RDN converts 6.72% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
8.92
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
2.21
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.04
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.54
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.26
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.04
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.12
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.08
vs 25 benchmark
How RDN Stacks Against Its Sector Peers
| Metric | RDN Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 8.92 | 18.91 | Better (Cheaper) |
| ROE | 12.01% | 810.00% | Weak |
| Net Margin | 40.28% | 1736.00% | Weak |
| Debt/Equity | 0.26 | 0.98 | Strong (Low Leverage) |
| Current Ratio | 0.04 | 621.89 | Weak Liquidity |
| ROA | 5.28% | -23442.00% (disorted) | Weak |
RDN outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Radian Group Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
22.68%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
109.69%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
-26.70%
Industry Style: Value, Dividend, Cyclical
Declining