Mortgage insurer MGIC Investment (NYSE: MTG) met Wall Street’s revenue expectations in Q3 2026, but revenue edged lower by 1.8% year on year to $299.1 million. Its non-GAAP profit of $0.85 per share was 4.1% above analysts’ consensus estimates.

For more on MGIC Investment, read our full research report, available free.

Revenue growth

Insurance companies generate revenue three ways. The first is the core insurance business itself, represented in the income statement as premiums earned. The second source is investment income from investing the “float” (premiums collected but not yet paid out as claims) in assets such as fixed-income assets and equities. The third is fees from policy administration, annuities and other value-added services. MGIC Investment struggled to consistently increase demand as its $1.19 billion of revenue for the trailing 12 months was close to its revenue five years ago. This fell short of our standards and points to poor business quality.

Long-term growth matters most, but within financials, a half-decade historical view may miss recent interest rate changes, market returns and industry trends. Just like its five-year trend, MGIC Investment’s revenue over the last two years was flat, suggesting it is in a slump.

Note: Quarters not shown were determined to be outliers because they were impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, MGIC Investment reported an uninspiring 1.8% year-on-year revenue decline to $299.1 million, in line with Wall Street’s consensus estimates.

Net premiums earned made up 81.9% of the company’s total revenue during the last five years, meaning MGIC Investment barely relies on non-insurance activities to drive its overall growth.

Markets consistently prioritize net premiums earned growth over investment and fee income, recognizing its superior quality as a core indicator of the company’s underwriting success and market penetration.

Book value per share (BVPS)

Insurers are balance sheet businesses, collecting premiums upfront and paying out claims over time. Premiums collected but not yet paid out, often referred to as the float, are invested and create an asset base supported by a liability structure. Book value per share, or BVPS, captures this dynamic by measuring these assets (investment portfolio, cash, reinsurance recoverables) less liabilities (claim reserves, debt, future policy benefits). BVPS is essentially the residual value for shareholders.

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

MGIC Investment’s BVPS grew at a solid 10.2% annual rate over the last five years. However, BVPS growth has recently decelerated a bit to 7.9% annual growth over the last two years (from $20.66 to $24.06 per share).

Key takeaways from MGIC Investment’s Q3 results

MGIC Investment delivered a mixed quarter with revenue meeting expectations and adjusted EPS beating consensus estimates. Shares remained flat at $29.11 immediately after the release.

Is MGIC Investment a buy? The latest quarter is only one part of assessing its longer-term business quality. Quality, combined with valuation, can help determine whether the stock is a buy. Read more in our full research report here (it’s free).