Mortgage insurance provider Radian Group (NYSE: RDN) fell short of the markets revenue expectations in Q3 CY2025, with sales falling 9.2% year on year to $303.2 million. Its non-GAAP profit of $1.15 per share was 14.1% above analysts’ consensus estimates.

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“We delivered excellent financial results during the quarter and announced our plans to strategically transform Radian into a global, multi-line specialty insurer,” said Radian’s Chief Executive Officer Rick Thornberry.

Company Overview

Founded during the housing boom of 1977 and weathering multiple real estate cycles since, Radian Group (NYSE: RDN) provides mortgage insurance and real estate services, helping lenders manage risk and homebuyers achieve affordable homeownership.

Revenue Growth

Insurers earn revenue three ways. The core insurance business itself, often called underwriting and represented in the income statement as premiums earned, is one way. Investment income from investing the “float” (premiums collected upfront not yet paid out as claims) in assets such as fixed-income assets and equities is the second way. Fees from various sources such as policy administration, annuities, or other value-added services is the third. Radian Group struggled to consistently generate demand over the last five years as its revenue dropped at a 2.9% annual rate. This wasn’t a great result and is a sign of lacking business quality.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Radian Group’s annualized revenue growth of 1.2% over the last two years is above its five-year trend, but we were still disappointed by the results. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Radian Group missed Wall Street’s estimates and reported a rather uninspiring 9.2% year-on-year revenue decline, generating $303.2 million of revenue.

Net premiums earned made up 77% of the company’s total revenue during the last five years, meaning insurance operations are Radian Group’s largest source of revenue.

While insurers generate revenue from multiple sources, investors view net premiums earned as the cornerstone - its direct link to core operations stands in sharp contrast to the unpredictability of investment returns and fees.

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Book Value Per Share (BVPS)

Insurance companies are balance sheet businesses, collecting premiums upfront and paying out claims over time. The float – premiums collected but not yet paid out – are invested, creating an asset base supported by a liability structure. Book value captures this dynamic by measuring:

• Assets (investment portfolio, cash, reinsurance recoverables) - liabilities (claim reserves, debt, future policy benefits)

BVPS is essentially the residual value for shareholders.

We therefore consider BVPS very important to track for insurers and a metric that sheds light on business quality because it reflects long-term capital growth and is harder to manipulate than more commonly-used metrics like EPS.

Radian Group’s BVPS grew at a solid 9.8% annual clip over the last five years. BVPS growth has also accelerated recently, growing by 13.4% annually over the last two years from $26.69 to $34.34 per share.

Key Takeaways from Radian Group’s Q3 Results

It was good to see Radian Group beat analysts’ EPS expectations this quarter. On the other hand, its revenue missed. Zooming out, we think this was a mixed quarter. The stock traded up 1.4% to $34.80 immediately following the results.

So do we think Radian Group is an attractive buy at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.