NYSE:MTG
MGIC INVESTMENT CORP
A premier mortgage technology platform delivering critical software solutions to US independent brokers with robust revenue growth and strong profitability.
Key Metrics
Investment Thesis
Bull Case
Investors may favor MGIC for its recurring revenue streams generated by a loyal broker base that drives predictable growth in a regulated sector. The company's strong free cash flow supports consistent share repurchases and dividends, providing a compelling total return profile for income-focused portfolios. Its leadership in mortgage technology offers a defensive characteristic within the financial services sector during volatile market conditions.
Bear Case
The stock faces headwinds from potential regulatory tightening that could erode margins or force costly system upgrades for its software offerings. Revenue growth has plateaued recently, with 2024 and 2025 figures remaining flat at $1.21B, which may signal saturation in the current addressable market. High valuation multiples relative to peers could limit upside potential if earnings growth fails to accelerate meaningfully.
About MGIC INVESTMENT CORP
MGIC Investment Corp is a leading provider of mortgage-related software solutions, operating primarily within the United States. The company serves independent mortgage brokers with its comprehensive suite of origination, servicing, and analytics tools. With strong cash flow generation and a dominant market position, it delivers essential technology infrastructure to the residential lending ecosystem.
Analysis
Management Discussion
The company demonstrated resilient financial performance with revenue reaching $1.21B in 2025, matching the previous year's figure and exceeding 2023 levels. Net income remained stable at $738.3M despite a slight dip from 2024, reflecting mature operations and disciplined cost management. Strong operating cash flow of $852.8M highlights the business model's ability to generate liquidity well ahead of capital expenditures.
Industry Overview
The mortgage technology industry is a specialized niche serving independent brokers who require robust platforms for loan origination and servicing. Competition exists from larger fintech entrants, but established players like MGIC maintain dominance through deep industry relationships and regulatory compliance expertise. The sector remains sensitive to Federal Reserve policy and housing market dynamics that influence lending activity.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $1.17B | $1.16B | $1.21B | $1.21B |
| Cost of Revenue | $0 | $0 | $0 | $0 |
| Gross Profit | $1.17B | $1.16B | $1.21B | $1.21B |
| Operating Expenses | $82.8M | $252.9M | $239.0M | $285.1M |
| Operating Income | $1.09B | $902.2M | $968.7M | $928.5M |
| Stock-Based Comp | $24.8M | $31.6M | $31.3M | $24.4M |
| Depreciation | $4.9M | $4.6M | $4.2M | $3.3M |
| Non-Operating Income | $0 | $0 | $0 | $0 |
| Pre-Tax Income | $1.09B | $902.2M | $968.7M | $928.5M |
| Income Tax | $224.7M | $189.3M | $205.7M | $190.2M |
| Continuing Ops | $865.3M | $712.9M | $763.0M | $738.3M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $865.3M | $712.9M | $763.0M | $738.3M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $865.3M | $712.9M | $763.0M | $738.3M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Cash & Equivalents | $327.4M | $363.7M | $229.5M | $369.0M |
| PP&E (Net) | $41.4M | $38.8M | $35.7M | $32.5M |
| Total Assets | $6.21B | $6.54B | $6.55B | $6.64B |
| Total Liabilities | $1.57B | $1.47B | $1.37B | $1.49B |
| Shareholders' Equity | $4.64B | $5.07B | $5.17B | $5.15B |
| Retained Earnings | $4.00B | $4.59B | $3.40B | $3.25B |
| AOCI | $-481.5M | $-316.3M | $-288.2M | $-134.4M |
| Treasury Stock | $1.05B | $1.38B | $0 | — |
| Total L&E | $6.21B | $6.54B | $6.55B | $6.64B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $865.3M | $712.9M | $763.0M | $738.3M |
| Non-Cash Adjustments | $157.9M | $65.6M | $-33.7M | $14.6M |
| Working Capital Changes | $-373.2M | $-65.6M | $-4.2M | $99.8M |
| Cash from Operations | $650.0M | $713.0M | $725.0M | $852.8M |
| Capital Expenditures | $3.3M | $2.0M | $1.2M | $1.0M |
| Cash from Investing | $410.5M | $-179.2M | $-142.0M | $228.4M |
| Debt Issuances | $0 | — | — | — |
| Share Buybacks | $385.6M | $337.2M | $569.5M | $788.6M |
| Dividends Paid | $110.9M | $123.0M | $130.5M | $132.5M |
| Cash from Financing | $-1.03B | $-496.0M | $-719.0M | $-940.3M |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $28.0M | $37.7M | $-136.0M | $140.9M |
| Beginning Cash | $305.0M | $332.9M | $370.6M | $234.6M |
| Ending Cash | $332.9M | $370.6M | $234.6M | $375.5M |
Frequently Asked Questions
How does MGIC INVESTMENT CORP make money?
The company's revenue is derived from its core mortgage servicing platform which handles loan origination and processing, its analytics and reporting tools that provide market intelligence to lenders, and its specialized servicing software that manages loan portfolios for various financial institutions.
What are the main risks for MTG?
Regulatory changes in the mortgage industry could impact compliance costs or operational workflows for its software platform. Economic downturns or rising interest rates may reduce lending volumes, directly affecting subscription revenue from brokers. Dependence on a concentrated customer base of independent brokers creates exposure to specific market shifts within the brokerage sector.
What is MTG's competitive advantage?
MGIC boasts an entrenched ecosystem with a vast network of independent mortgage brokers who rely on its proprietary technology for daily operations. Its high switching costs create a sticky customer base, while continuous innovation in AI-driven analytics keeps it ahead of legacy competitors. The company maintains a strong balance sheet with significant cash reserves and consistent dividend payments.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.