A month has gone by since the last earnings report for MGIC Investment (MTG Quick QuoteMTG - Free Report) . Shares have added about 3.5% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is MGIC due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

MGIC Investment Q1 Earnings In Line, Revenues Fall Y/Y

MGIC Investment reported first-quarter 2021 operating net income per share of 42 cents, in line with the Zacks Consensus Estimate. The reported figure was flat year over year.

The company witnessed lower premiums earned and net investment income as well as higher expenses, offset by improved loss ratio.

Operational Update

Insurance in force increased 11.6% from the prior-year quarter to $251.7 billion.

The company witnessed a 92.7% increase in primary delinquency to 52,775 loans, primarily due to the adverse economic impact of COVID-19.

MGIC Investment recorded total operating revenues of $296 million, which decreased 2.9% year over year on lower premiums earned and net investment income.

Net premiums earned decreased 2.3% year over year to $255 million due to an increase in ceded premiums written and lower average premium rates on insurance in force. This was partially offset by higher average insurance in force. Net premiums earned were impacted by an increase in accelerated premiums earned from single premium policy cancellations.

Net investment income decreased 8.3% year over year to $37.9 million due to lower investment yields, partially offset by an increase in the consolidated investment portfolio.

Persistency — the percentage of insurance remaining in force from one year prior — was 56.2% as of Mar 31, 2020, down 1680 basis points (bps) year over year.

New insurance written was $30.8 billion, up 72.1% year over year due to resilience of the purchase mortgage market, attractive refinance market and MGIC Investment’s positioning in the market.

Net underwriting and other expenses totaled $50.7 million, up 13.2% year over year.

For the quarter under review, loss ratio was 15.5%, which improved 790 bps year over year.

Financial Update

Book value per share, a measure of net worth, grew about 0.5% from 2020-end to $13.95 as of Mar 31, 2021.

MGIC Investment had $802 million in cash, cash equivalents and investments, up 42.4% year over year.

Total assets were $7.4 billion, up 0.7% from the 2020-end level.

Capital Deployment

MGIC Investment paid out dividends of $390 million to its holding company while MGIC Investment Corporation paid 6 cents per share in dividend per common share to shareholders during first-quarter 2021.

As of Mar 31, 2020, the company had shares worth $291 million remaining under the share buyback authorization.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

VGM Scores

Currently, MGIC has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision has been net zero. Notably, MGIC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.