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Assured Guaranty (AGO)
:AGO
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Assured Guaranty
(NYSE:AGO)67Neutral
Assured Guaranty (AGO) vs. S&P 500 (SPY)
Market Cap
$4.15B
Dividend Yield1.45%
Average Volume (3M)283.16K
Price to Earnings (P/E)12.2
Beta (1Y)0.87
Revenue Growth1.80%
EPS Growth71.04%
CountryUS
Employees350
SectorFinancial
Sector Strength93
IndustryInsurance
Share Statistics
EPS (TTM)6.82
Shares Outstanding50,103,140
10 Day Avg. Volume376,579
30 Day Avg. Volume283,157
Financial Highlights & Ratios
PEG Ratio0.10
Price to Book (P/B)N/A
Price to Sales (P/S)5.51
Price to Cash Flow (P/CF)23.20
P/FCF Ratio23.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$107.50Price Target Upside29.67% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Assured Guaranty Business Overview & Revenue Model
Company DescriptionAssured Guaranty Ltd. (AGO) is a leading financial guaranty insurance company, primarily engaged in providing credit protection products to public finance, infrastructure, and structured finance sectors. The company's core products include municipal bond insurance, which enhances the creditworthiness of bonds issued by municipalities and other governmental entities, as well as structured finance products that help manage risk and improve financial flexibility for its clients.
How the Company Makes MoneyAssured Guaranty makes money primarily by charging premiums for providing financial guaranty insurance on bonds and other financial obligations. When the company insures a bond, it guarantees the payment of principal and interest to investors in case of default, thereby enhancing the bond's credit rating and reducing borrowing costs for issuers. AGO earns revenue from the upfront and installment premiums paid by issuers of the insured bonds. Additionally, the company invests the premiums it receives, generating investment income which contributes to its overall earnings. Significant factors that contribute to AGO's revenue include the volume of new insurance policies underwritten, prevailing interest rates affecting investment income, and the credit environment influencing demand for its products.
Assured Guaranty Financial Statement Overview
Summary
Assured Guaranty has demonstrated resilience in revenue recovery and profitability in 2023, but faces challenges with high leverage and cash flow volatility. The balance sheet shows strong equity but is offset by considerable debt levels. Continued focus on maintaining revenue growth and managing debt levels will be crucial for future stability.Income Statement
The revenue has shown inconsistency, with a decline from 2020 to 2022, but a rebound in 2023. The gross profit margin remained strong, and there was a significant improvement in net income for 2023. However, EBIT and EBITDA margins have not been consistently reported, limiting complete profitability analysis.70
Positive
Balance Sheet
Assured Guaranty maintains a strong equity base, reflected in a healthy equity ratio. However, a high debt-to-equity ratio remains a concern, although it's stable. The company shows a fluctuating ROE, with a notable increase in recent years, indicating improved profitability.65
Positive
Cash Flow
Cash flow from operations has improved in 2023, showing a positive trend after consecutive years of negative free cash flow. The operating cash flow to net income ratio indicates better cash management, but historical volatility in cash flows presents a risk.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 872.00M | 950.00M | 684.00M | 698.00M | 1.08B | Gross Profit |
| 872.00M | 733.00M | 517.00M | 519.00M | 887.00M | EBIT |
| 0.00 | 699.00M | 203.00M | 426.00M | 332.00M | EBITDA |
| 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | Net Income Common Stockholders |
| 376.00M | 739.00M | 124.00M | 389.00M | 362.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 6.49B | 132.00M | 8.04B | 9.55B | 9.79B | Total Assets |
| 11.90B | 12.54B | 16.84B | 18.21B | 15.33B | Total Debt |
| 1.70B | 1.69B | 1.68B | 1.67B | 1.22B | Net Debt |
| 1.58B | 1.60B | 1.57B | 1.55B | 1.06B | Total Liabilities |
| 6.35B | 6.77B | 11.55B | 1.67B | 1.22B | Stockholders Equity |
| 5.50B | 5.71B | 5.06B | 6.29B | 6.64B |
| Cash Flow | Free Cash Flow | |||
| 625.00M | 461.00M | -2.45B | -1.94B | -853.00M | Operating Cash Flow |
| 625.00M | 461.00M | -2.48B | -1.94B | -853.00M | Investing Cash Flow |
| -26.00M | 286.00M | 1.74B | 23.00M | 788.00M | Financing Cash Flow |
| -598.00M | -670.00M | 612.00M | 1.96B | 183.00M |
Assured Guaranty Technical Analysis
Negative
82.90
Price Trends
90.38
Negative
89.07
Negative
83.36
Positive
Market Momentum
-1.39
Positive
37.11
Neutral
13.57
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AGO, the sentiment is Negative. The current price of 82.9 is below the 20-day moving average (MA) of 89.82, below the 50-day MA of 90.38, and below the 200-day MA of 83.36, indicating a neutral trend. The MACD of -1.39 indicates Positive momentum. The RSI at 37.11 is Neutral, neither overbought nor oversold. The STOCH value of 13.57 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AGO.
Assured Guaranty Risk Analysis
Assured Guaranty disclosed 52 risk factors in its most recent earnings report. Assured Guaranty reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Assured Guaranty Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $4.65B | 8.18 | 13.40% | 3.09% | 3.79% | 3.86% | |
70 Outperform | $5.64B | 8.23 | 14.75% | 2.12% | 4.52% | 15.94% | |
67 Neutral | $4.15B | 12.18 | 6.71% | 1.45% | 1.80% | 71.04% | |
67 Neutral | $4.80B | 21.05 | 5.22% | 0.05% | 39.19% | 145.55% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
41 Neutral | $401.38M | 5.98 | 2.04% | ― | 40.49% | -110.44% | |
27 Underperform | $269.13M | ― | 26.69% | ― | -128.72% | -32.62% |
* Financial Sector Average
Performance Comparison
AGO
Assured Guaranty
82.90
-5.23
-5.93%
MBI
MBIA
5.13
-1.53
-22.97%
MTG
MGIC Investment
23.23
2.79
13.65%
RDN
Radian Group
31.97
1.44
4.72%
WTM
White Mountains Insurance Group
1,891.69
163.70
9.47%
AMBC
Ambac Financial
8.68
-6.76
-43.78%
Assured Guaranty Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -9.73% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements such as record highs in key financial metrics, strong stock performance, new business production, geographic expansion, and successful litigation outcomes. However, these were countered by increased loss expenses, a decline in adjusted operating income, and ongoing uncertainty in Puerto Rico exposure. While the highlights present a positive outlook with strategic growth and successful initiatives, the lowlights indicate challenges that need to be addressed.Highlights
Record Highs in Key Financial Metrics
Assured Guaranty reached record year-end highs for adjusted book value per share at $170.12, adjusted operating shareholders equity per share at $114.75, and shareholders' equity per share at $108.80.
Strong Stock Performance and Share Repurchase
AGO's common stock share price rose 20% for the year to $90.01, and they repurchased 11% of the common shares outstanding at December 31, 2023, meeting their 2024 target of repurchasing $500 million of shares.
Successful New Business Production
PVP across their three financial guaranty businesses topped $400 million for the second year in a row. US public finance originated $270 million in PVP, its highest annual total in four years.
Geographic Expansion
Opened offices in Australia and Singapore and made further inroads in Continental Europe, expanding their geographic reach and pursuing opportunities in Australia, New Zealand, and Asia.
Successful Litigation Outcome
In early February 2025, they concluded litigation with Lehman Brothers International Europe, recognizing a pre-tax gain of approximately $103 million in the first quarter of 2025.
Dividend Increase
The Board of Directors approved a 10% increase to their quarterly dividend per share from $0.31 to $0.34.
Lowlights
Increased Loss Expenses
Loss expense increased from $7 million in Q4 2023 to $31 million in Q4 2024, mainly due to lower expected recoveries on certain long-dated US public finance transactions and increased losses on certain insured healthcare transactions.
Decline in Adjusted Operating Income
Fourth quarter 2024 adjusted operating income was $66 million, a significant decrease from $338 million in the same period of 2023, due in part to non-recurring benefits in 2023.
Continued Puerto Rico Exposure Uncertainty
The Title III Court extended the time for parties to resolve differences regarding PREPA exposures, indicating ongoing uncertainty and unresolved issues.
Company Guidance
During the Assured Guaranty Limited Fourth Quarter and Full Year 2024 Earnings Conference Call, significant metrics were highlighted related to the company's performance and strategic initiatives in 2024. The company reported an adjusted operating income per share of $7.10. Notably, they achieved record year-end highs for adjusted book value per share at $170.12, adjusted operating shareholders' equity per share at $114.75, and shareholders' equity per share at $108.80. Assured Guaranty repurchased 11% of its common shares, amounting to $500 million, and reported a 20% rise in their common stock share price to $90.01. The company also noted strong new business production with PVP exceeding $400 million across its three financial guaranty businesses for the second consecutive year. Additionally, they opened new offices in Australia and Singapore, further expanding their geographic reach. These achievements underscore Assured Guaranty's strategic moves to enhance growth, profitability, and corporate efficiency, positioning them well for success in 2025.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.