Assured Guaranty (AGO): Is the Stock Still Undervalued After Recent Gains?

Assured Guaranty (AGO) has caught investor attention lately, with the stock staying relatively steady over the past week and delivering gains of 7% for the month. Many are reassessing its performance and value in a market known for its twists and turns.

See our latest analysis for Assured Guaranty.

Assured Guaranty’s recent uptick adds to a longer story. While the stock’s 1-month share price return sits at a healthy 6.7%, its total shareholder return over the past year is still down 2.6%. However, the bigger picture shows strong long-term gains, with total returns exceeding 50% over three years and nearly tripling over five years, suggesting that investor momentum might be stabilizing after a softer stretch.

If you’re reassessing your portfolio in light of these shifts, now is a timely moment to discover fast growing stocks with high insider ownership.

With shares still trading well below some analyst targets despite recent gains, the question now is whether Assured Guaranty remains undervalued or if the market has already factored in any future rebound. Is there a real buying opportunity, or are expectations now fully reflected in the current price?

Most Popular Narrative: 17.3% Undervalued

Compared to the last close of $88.05, the narrative puts Assured Guaranty's fair value at $106.50, suggesting considerable headroom for further upside if the underlying assumptions hold true. This outlook pivots on bold moves made by the company and the impact of upcoming catalysts.

The consolidation of their insurance subsidiaries into Assured Guaranty Inc. is expected to create a more efficient capital structure, leading to higher profitability and improved net margins due to the increased diversification and larger capital base.

Read the complete narrative.

How could structural changes unlock new profit streams? The narrative hooks investors with claims of rising efficiency and profitability, driven by a transformation few see coming. But which internal moves or projections are the linchpins for the valuation? Unpack the story behind these bullish expectations and see what the analysts are betting on.

Result: Fair Value of $106.50 (UNDERVALUED)

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

However, shifts in interest rates or troubles from risky credits could quickly alter the outlook and challenge the more optimistic scenario for Assured Guaranty.

Find out about the key risks to this Assured Guaranty narrative.

Build Your Own Assured Guaranty Narrative

If you see things differently or want to dig into the details for yourself, you can craft your own take in just a few minutes. Do it your way.

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

Looking for More Investment Ideas?

Expand your investment horizons and discover unique opportunities that others might overlook. Let Simply Wall Street's powerful screener reveal standout stocks you don’t want to miss.

• Tap into next-generation innovation by reviewing these 26 quantum computing stocks, where technology is pushing boundaries and transforming entire industries.
• Boost your portfolio’s income potential as you uncover these 16 dividend stocks with yields > 3% producing attractive yields and steady cash flows.
• Stay ahead of the curve with these 25 AI penny stocks, which are set to accelerate growth in artificial intelligence and shape tomorrow’s markets.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com