MeritValue

RADIAN GROUP INC

RDNdata completeness 88%17 fiscal years on file
The thesis, from the filings

RADIAN GROUP INC earns about 17% on invested capital, comfortably above its ~9% cost of capital, and has bought back 26% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $11.03 and $44.39 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$1.33B1$1.19B2$1.18B3$1.21B3$1.2B3
Net income$600.7M4$742.9M5$603.1M6$604.4M6$582.6M6
Operating cash flow$557.1M7$388.3M8$529.4M9−$663.6M9$119.9M9
Capital expenditure$12.6M10$17.7M11$8.53M12$1.56M12$4.21M12
Free cash flow (derived)$544.5M7$370.6M8$520.9M9−$665.1M9$115.7M9
Total debt—————
Cash & equivalents$151.1M13$56.2M14$19M15$19.2M16$24.8M16
Diluted shares190.3M170.7M160.1M154.2M140.8M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$339.57
your share of equity
Profit it earned you last year
$41.38
Free cash flow it threw off
$8.21
Debt you’d be carrying
—

10 shares is a claim on $339.57 of net worth that earned you $41.38 and generated $8.21 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
17% avg · 5y
FY21 16%FY22 21%FY23 17%FY24 16%FY25 14%

It earned about 17% on invested capital against a ~9% cost of capital — comfortably above the cost of funding, a moderate advantage.

seeing a moat in the numbers →
Management signal · capital allocation
−26% shares · 5y

Share count is down 26% over 5 years — management has been buying back stock, quietly handing owners a bigger slice.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $11.03 and $44.39 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$11.03
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$115.7M
DCF · Growth Exit 5Y
$11.91
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$115.7M
Earnings Power Value
$44.39
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$603.1M
  • growthAssumed0.0%
Graham Number
$56.24
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years0.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $11.91
The three cases
Bear0.0%$11.91
Base0.0%$11.91
Bull5.0%$14.75

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 0.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000890926-24-000006 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0000950170-25-021241 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0001193125-26-061383 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0000890926-24-000006 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000950170-25-021241 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001193125-26-061383 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000890926-24-000006 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000950170-25-021241 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001193125-26-061383 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000890926-24-000006 (PaymentsToAcquireProductiveAssets)
  11. 10-K · period ending 2022-12-31 · accession 0000950170-25-021241 (PaymentsToAcquireProductiveAssets)
  12. 10-K · period ending 2023-12-31 · accession 0001193125-26-061383 (PaymentsToAcquireProductiveAssets)
  13. 10-K · period ending 2021-12-31 · accession 0000890926-23-000007 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2022-12-31 · accession 0000890926-24-000006 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-12-31 · accession 0000950170-25-021241 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2024-12-31 · accession 0001193125-26-061383 (CashAndCashEquivalentsAtCarryingValue)