MBI

We rate MBIA INC (MBI) as Avoid with a composite score of 37.5/100 at a current price of $6.06. The stock falls in the bottom quintile of our universe across key quantitative factors, and the multi-factor weakness suggests a high probability of continued underperformance.

The rating is primarily driven by strength in value (57th percentile) and quality (45th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (23th percentile) and stability (29th percentile) tempers our overall conviction. We assign a No Moat rating (17/100), High uncertainty, and Poor capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs; the path to profitability. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is narrowing, which raises the risk of a future downgrade if the trend persists.

MBIA INC holds a top-quartile position (#0 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 37.5/100 places it at rank #3832 in our full 7,333-stock universe. At $376M in market capitalization, MBIA INC is a small-cap player in the Finance, Insurance, And Real Estate space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue contraction of -48% combined with momentum at the 23th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.

The margin cascade tells an important story: gross margins of 100% (+23.5pp vs sector) narrow to operating margins of -227% (-244.2pp vs sector) and net margins of -229.7%, yielding a gross-to-net conversion rate of -230%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $6.06, MBIA INC is trading near fair value based on current fundamentals. Our value factor score of 57/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at EV/EBITDA of 1.7x (discounted to peers), P/S of 3.9x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.

We assign a High uncertainty rating to MBIA INC. Key risk factors include current negative profitability (net margin -229.7%), below-average price stability (29th percentile). The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: current negative profitability (net margin -229.7%); below-average price stability (29th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 29th percentile and quality factor at the 45th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 100% provide a buffer against cost pressures. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate MBIA INC's capital allocation as Poor. Key concerns include negative profitability, weak asset returns (ROA -8.6%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — MBIA INC significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.

Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.

In summary, MBIA INC receives a Avoid rating with a composite score of 37.5/100 (rank #3832 of 7,333). Our quantitative framework assigns a No Moat (17/100, trend: narrowing), High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 38/100.

Our analysis does not support a constructive view on MBIA INC at this time. The combination of limited competitive advantages, high uncertainty, and poor capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.