A month has gone by since the last earnings report for Radian (RDN Quick QuoteRDN - Free Report) . Shares have lost about 6% in that time frame, underperforming the S&P 500.

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

Radian Group's Q1 Earnings Top, Revenues Rise Y/Y

Radian Group reported first-quarter 2022 adjusted operating income of $1.17 per share, which beat the Zacks Consensus Estimate by 28.6%. The bottom line increased 72.1% year over year.

The results reflected strong growth in the housing and real estate markets along with sustained demand for products and services.

Quarter in Details

Operating revenues increased 3.5% year over year to $322 million on higher service revenues.

Net premiums earned were $254.2 million, down 6.5% year over year. Net investment income fell 0.1% year over year to $37.4 million. MI New Insurance Written decreased 7.4% year over year to $18.7 billion.

Primary mortgage insurance in force was $249 billion as of Mar 31, 2022, up 4.2% year over year. The year-over-year increase reflects a 10.3% increase in monthly premium policy insurance in force and a 19.1% decline in single premium policy insurance in force.

Persistency — the percentage of mortgage insurance in force that remains in the company’s books after a 12-month period — was 68% as of Mar 31, 2022, up 1080 basis points (bps) year over year.

Primary delinquent loans were 25,510 as of Dec 31, 2021, down 49% year over year.

Total expenses decreased 64.7% year over year to $58.8 million on account of lower policy acquisition costs, interest expense and amortization of other acquired intangible assets. The expense ratio was 27.2, a deterioration from 21.9 in the year-ago quarter.

Segmental Update

The Mortgage segment reported a year-over-year decrease of 6.4% in total revenues to $284.4 million. Net premiums earned by the segment were $245.2 million, down 7.4% year over year. Claims paid were $4.7 million, down 55.2% year over year. The loss ratio was (34.3) against 17.3 in the year-ago quarter.

The homegenius segment’s revenues of $33.9 million climbed 31.4% year over year, driven by solid real estate services businesses. Adjusted pre-tax operating loss was $13.5 million, wider than the prior-year quarter’s loss of $10.5 million.

Financial Update

As of Mar 31, 2022, Radian Group had a solid cash balance of $131.9 million, down from $151.1 million at 2021-end level. The debt-to-capital ratio deteriorated 50 bps to 25.4 from the 2021-end level.

Book value per share, a measure of net worth, climbed 7.3% year over year to $23.75 as of Mar 31, 2022. Adjusted net operating return on equity was 19.9% compared with 12.4% in the year-ago quarter.

The risk-to-capital ratio of Radian Guaranty as of first-quarter end was 12.1:1, higher than 11.1:1 from the 2021-end level. Excess available resources to support PMIERs of $1.6 billion were 44% higher than Radian Guaranty's minimum required assets.

Share Repurchase and Dividend Update

Radian bought back 0.9 million shares worth $21.3 million in the first quarter of 2022. In April 2022, Radian purchased an additional 1.8 million shares for $39.3 million and is left with $339.4 million available under the existing program.

On Feb 9, 2022, Radian Group’s board of directors authorized a regular quarterly dividend of 20 cents per share and the dividend was paid on Mar 3, 2022.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.