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1. Company Snapshot

1.a. Company Description

Ambac Financial Group, Inc., a financial services holding company, provides financial guarantees in the United States, the United Kingdom, Italy, Austria, Australia, France, and Internationally.It offers financial guarantee insurance policies; specialty property & casualty program insurance; credit derivative contracts; and interest rate derivative transactions, as well as managing general agency / underwriting services.The company was incorporated in 1991 and is headquartered in New York, New York.

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1.b. Last Insights on AMBC

Ambac Financial Group's recent performance was negatively driven by an earnings miss for Q4 2024, with EPS coming in lower than expected. The company's profitable underwriting and build-out of a higher-ROE distribution platform are fundamental improvements, but the sale of the legacy business remains pending approval from Wisconsin, creating a delay. Additionally, the company faces risks from recent hurricanes and potential disruptions to its recent acquisitions.

1.c. Company Highlights

2. Ambac's Q3 2025 Earnings: A Mixed Bag

Ambac reported a net loss from continuing operations to shareholders of $32 million or 67¢ per diluted share for the third quarter of 2025. The loss was driven by increased intangible amortization and interest and G&A expenses. Adjusted EBITDA from continuing operations was a loss of $3 million, compared to a sub $2 million gain in 2024. The insurance distribution segment reported revenue growth of 80% compared to 2024, to $43 million, with a 23% margin. The actual EPS came out at '-0.21', beating estimates at '-0.23'. Everspan's net written and net earned premium were $18 million and $17 million, down from $33 million and $27 million, respectively, due to the nonrenewal of certain personal and commercial auto programs.

Publication Date: Nov -18

📋 Highlights
  • Restructured & Sold Financial Guarantee Business: Achieved $420M sale in 2025, exiting rehabilitation begun in 2018.
  • Share Buybacks Completed: Repurchased 3.1M shares (6.5% of weighted average shares) under capital management plan.
  • Corporate Expense Reductions: Over $10M annualized cost savings from operational efficiencies.
  • Insurance Distribution Growth: 80% YoY revenue increase to $43M with 23% margin in Q3 2025.
  • 2028 EBITDA Target: Aims for $80M EBITDA, driven by 9 new MGAs (launched 2024-2025) and margin expansion.

Segment Performance

The insurance distribution segment was the bright spot, with revenue growth of 80% to $43 million. Everspan, on the other hand, saw a decline in net written and net earned premium. The company's management attributed this to the nonrenewal of certain personal and commercial auto programs. As Claude LeBlanc mentioned, "Our platform is uniquely positioned to deliver value through two complementary growth engines: our de novo incubation division, Octave Ventures, and our M&A division, Octave Partners."

Outlook and Guidance

The company's premium outlook is for controlled, modest growth, with expected revenue of $370-380 million this year and over $400 million next year. Analysts estimate next year's revenue growth at 10.6%. Interest expense is expected to decrease significantly after credit repair, to around $7 million. EBITDA margins are expected to be 5-7% relative to written premium.

Valuation

With a Price-to-Book Ratio of 0.52, the stock appears to be undervalued. The EV/EBITDA ratio is -3.65, indicating that the company's enterprise value is not justified by its current EBITDA. The ROE is -72.19%, which is a concern. However, the company's strategic initiatives, including the launch of new MGAs and the M&A division, are expected to drive growth and improve profitability.

3. NewsRoom

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60,546 Shares in Ambac Financial Group, Inc. $AMBC Bought by Aurelius Capital Management LP

Dec -01

Source: defenseworld.net

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AXQ Capital LP Acquires 7,694 Shares of Ambac Financial Group, Inc. $AMBC

Nov -25

Source: defenseworld.net

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Ambac (AMBC) Upgraded to Buy: Here's What You Should Know

Nov -13

Source: zacks.com

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Wall Street Analysts Predict a 48.03% Upside in Ambac (AMBC): Here's What You Should Know

Nov -13

Source: zacks.com

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Ambac Financial Group, Inc. (AMBC) Q3 2025 Earnings Call Transcript

Nov -11

Source: seekingalpha.com

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Ambac Financial Group (AMBC) Reports Q3 Loss, Tops Revenue Estimates

Nov -11

Source: zacks.com

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Ambac Financial Group Rebrands as Octave Specialty Group, Inc.

Nov -10

Source: businesswire.com

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Ambac Reports Third Quarter 2025 Results

Nov -10

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.08%)

6. Segments

Legacy Financial Guarantee Insurance

Expected Growth: 1.2%

Ambac's Legacy Financial Guarantee Insurance growth is driven by increasing demand for credit enhancement, rising municipal bond issuance, and expanding public-private partnerships. Additionally, the company's strong risk management and underwriting practices, as well as its diversified portfolio, contribute to its 1.2% growth.

Specialty Property and Casualty Insurance

Expected Growth: 0.8%

Ambac's Specialty Property and Casualty Insurance segment growth is driven by increasing demand for specialty insurance products, expansion into new markets, and strategic partnerships. Additionally, the company's strong underwriting discipline, risk management capabilities, and diversified portfolio contribute to its 0.8 growth rate.

Insurance Distribution

Expected Growth: 1.1%

Ambac Financial Group, Inc.'s Insurance Distribution segment growth of 1.1% is driven by increasing demand for mortgage insurance, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digital transformation and improved operational efficiency have contributed to the growth. Furthermore, the rising need for risk management solutions and a growing insured population have also supported the segment's growth.

Corporate and Other

Expected Growth: 0.9%

Ambac Financial Group's Corporate and Other segment growth of 0.9 is driven by increasing investment income, reduced operating expenses, and a favorable tax environment. Additionally, the company's strategic initiatives, such as cost savings and efficiency programs, have contributed to the segment's growth.

7. Detailed Products

Municipal Bond Insurance

Ambac Financial Group provides financial guarantee insurance for municipal bonds, which helps to enhance the creditworthiness of the bonds and provides investors with a higher level of security.

Structured Finance Insurance

Ambac provides financial guarantee insurance for structured finance transactions, such as collateralized debt obligations (CDOs) and mortgage-backed securities (MBS).

Public Finance Insurance

Ambac provides financial guarantee insurance for public finance transactions, such as bonds issued by states, cities, and other public entities.

Surplus Lines Insurance

Ambac provides surplus lines insurance, which provides excess liability coverage for businesses and individuals.

8. Ambac Financial Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Ambac Financial Group, Inc. is medium due to the availability of alternative financial services and products offered by competitors.

Bargaining Power Of Customers

The bargaining power of customers for Ambac Financial Group, Inc. is low due to the company's strong brand reputation and limited alternatives for customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Ambac Financial Group, Inc. is medium due to the company's dependence on a few key suppliers and the availability of alternative suppliers.

Threat Of New Entrants

The threat of new entrants for Ambac Financial Group, Inc. is high due to the low barriers to entry in the financial services industry and the attractiveness of the market.

Intensity Of Rivalry

The intensity of rivalry for Ambac Financial Group, Inc. is high due to the highly competitive nature of the financial services industry and the presence of several established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 71.87%
Debt Cost 4.39%
Equity Weight 28.13%
Equity Cost 10.46%
WACC 6.10%
Leverage 255.43%

11. Quality Control: Ambac Financial Group, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Investors Title

A-Score: 6.9/10

Value: 5.0

Growth: 4.7

Quality: 7.9

Yield: 10.0

Momentum: 7.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Tiptree

A-Score: 5.9/10

Value: 8.1

Growth: 7.7

Quality: 6.9

Yield: 4.0

Momentum: 4.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
AMERISAFE

A-Score: 5.6/10

Value: 3.5

Growth: 2.2

Quality: 7.0

Yield: 10.0

Momentum: 2.0

Volatility: 9.0

1-Year Total Return ->

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MBIA

A-Score: 5.3/10

Value: 8.6

Growth: 1.3

Quality: 5.2

Yield: 5.0

Momentum: 9.5

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
ICC Holdings

A-Score: 4.8/10

Value: 4.9

Growth: 7.3

Quality: 5.1

Yield: 0.0

Momentum: 5.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Ambac Financial Group

A-Score: 3.3/10

Value: 9.0

Growth: 2.9

Quality: 3.7

Yield: 0.0

Momentum: 1.0

Volatility: 3.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.57$

Current Price

8.57$

Potential

-0.00%

Expected Cash-Flows