The 10-second takeaway
For the quarter ended June 30 (Q2), Radian Group whiffed on revenues and exceeded expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank significantly and GAAP earnings per share shrank to a loss.
Margins dropped across the board.
Radian Group booked revenue of $158.2 million. The four analysts polled by S&P Capital IQ predicted a top line of $223.6 million on the same basis. GAAP reported sales were 64% lower than the prior-year quarter's $435.5 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at -$0.38. The six earnings estimates compiled by S&P Capital IQ forecast -$0.54 per share. GAAP EPS were -$0.90 for Q2 compared to $1.03 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was -40.6%, 7,680 basis points worse than the prior-year quarter. Operating margin was -66.1%, 9,170 basis points worse than the prior-year quarter. Net margin was -75.7%, 10,720 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $218.2 million. On the bottom line, the average EPS estimate is -$0.46.
Next year's average estimate for revenue is $861.7 million. The average EPS estimate is -$2.34.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 404 members out of 579 rating the stock outperform, and 175 members rating it underperform. Among 129 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 68 give Radian Group a green thumbs-up, and 61 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Radian Group is hold, with an average price target of $5.08.
Over the decades, small-cap stocks, like Radian Group have provided market-beating returns, provided they're value priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.
- Add Radian Group to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.