MGIC Investment's Q4 Revenue Falls Short of Estimates as Mortgage Market Headwinds Persist

MGIC Investment Corp. (NYSE: MTG), a leading private mortgage insurer, reported fourth-quarter revenue that fell short of Wall Street's forecasts, underscoring the persistent pressures in the U.S. housing sector. Sales for the quarter remained essentially flat year-over-year at $298.7 million, missing estimates. The company's non-GAAP earnings of $0.75 per share aligned with analyst consensus.

In a statement, CEO Tim Mattke struck a positive note on the full-year performance: "We closed 2025 on a strong note, once again delivering solid financial results and ending the year with more than $303 billion of insurance in-force." The Milwaukee-based company, founded in 1957, provides insurance that protects lenders against defaults, enabling home purchases with lower down payments.

Analysts point to the broader mortgage landscape as a key factor. "The revenue miss reflects a broader slowdown in mortgage origination volume," said David Chen, a financial sector analyst at Horizon Advisors. "While MGIC's book value growth remains robust, top-line expansion is directly tied to housing transaction activity, which has been subdued by elevated interest rates."

The company's performance reveals its heavy reliance on its core underwriting business. Over the past five years, net premiums earned have constituted 82.7% of total revenue, indicating minimal contribution from investment income or fee-based services. This focus makes the company particularly sensitive to cycles in the housing market.

Despite the revenue shortfall, a key measure of financial strength showed resilience. MGIC's book value per share (BVPS) has grown at an impressive 11.1% annual rate over five years, accelerating to 12.3% over the past two years, reaching $23.47. For insurers, BVPS is a critical metric as it reflects long-term capital growth and is less susceptible to short-term accounting adjustments than earnings per share.

The market's initial reaction was muted, with the stock holding steady near $27.54 following the earnings release.

Investor Reactions: A Mixed Bag

We gathered perspectives from three investors following the report:

• Sarah Jensen, Portfolio Manager at Clearwater Capital: "The BVPS growth is the real story here. It shows underlying capital strength and disciplined risk management. In a volatile rate environment, that stability is worth more than a single quarter's revenue miss."
• Michael Torres, Independent Retail Investor: "Another quarter of stagnant sales? This is getting old. The CEO talks about a 'strong note,' but where's the growth? The housing market isn't crashing, yet MGIC can't find a way to grow premiums. It feels like management is out of ideas." (More emotional/pointed)
• Dr. Aris Thorne, Economics Professor at Franklin University: "MGIC's results are a useful microcosm of the current 'high-rate, low-volume' mortgage era. Their model is structurally sound, but top-line growth is on hold until the Fed provides more certainty. The acceleration in book value suggests they are positioning themselves well for the next cycle."

Note: The company indicated that certain historical quarters not featured in specific growth comparisons were considered outliers due to non-recurring investment gains or losses.