Radian Group (RDN): Evaluating Share Valuation After Mixed Q3 Results Reveal Revenue Decline, EPS Growth

Radian Group (RDN) just released its third-quarter financial results, reporting a drop in both revenue and net income along with a slight uptick in diluted earnings per share from continuing operations. Investors are weighing what this means moving forward.

See our latest analysis for Radian Group.

Radian Group’s latest earnings have added a new twist to its story, with a year-on-year revenue dip but an uptick in per-share earnings causing investors to reevaluate their outlook. The share price has edged up 6.2% year-to-date, and while the past month saw a pullback, the longer-term picture remains robust. Total shareholder returns have reached nearly 80% over three years and almost 120% in five, pointing to sustained value creation even as near-term momentum takes a breather.

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With shares trading below analyst targets and an intrinsic discount still in place, should investors view Radian Group as an undervalued opportunity, or has the market already factored in all of its future growth?

Most Popular Narrative: 12.3% Undervalued

With Radian Group closing at $33.90 and the most popular narrative assigning a fair value of $38.67, the market could be missing overlooked upside. Investors want to know if this gap is sustainable or just waiting to disappear.

The ongoing entry of millennials and first-time homebuyers into the housing market is driving persistently strong housing demand. This is reflected in Radian's all-time high mortgage insurance in force and continued growth in new insurance written, which supports future revenue growth.

Read the complete narrative.

Curious how robust homebuyer trends and fresh capital management strategies could impact Radian’s future? There’s one key earnings and margin expectation at the heart of this story. Want to unlock what really moves the narrative’s fair value? Dive in to see the high-stakes numbers that shape Wall Street’s outlook.

Result: Fair Value of $38.67 (UNDERVALUED)

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

However, sluggish progress in diversifying beyond mortgage insurance, along with ongoing weaknesses in non-core segments, could quickly spark greater earnings volatility for Radian Group.

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

Build Your Own Radian Group Narrative

If you think there’s more to the story or want to see how the numbers stack up for yourself, it only takes a few minutes to build your own perspective. Do it your way.

A great starting point for your Radian Group research is our analysis highlighting 2 key rewards and 1 important warning sign 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.

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