What just happened with Genworth Financial stock
Genworth Financial (GNW) has drawn fresh attention after reporting fourth quarter and full year 2025 results, as well as completing a share buyback that retired more than 10 million shares.
See our latest analysis for Genworth Financial.
At a share price of US$8.43, Genworth’s short term share price returns, including a 1 month share price return of 6.64% decline and a year to date share price return of 6.02% decline, contrast with a 1 year total shareholder return of 26.58% and 5 year total shareholder return of 137.46%. This suggests longer term investors have experienced stronger momentum than recent traders as the latest earnings and buyback activity filter through sentiment.
If this update has you thinking about where else capital might find long run compounding, it could be a good time to check out our 20 top founder-led companies as a starting list of ideas.
With earnings basically flat, full-year profit lower than last year, and more than 10 million shares taken off the table, are you looking at an undervalued insurer here, or has the market already priced in what comes next?
Preferred P/E of 14.7x: Is it justified?
Genworth Financial trades on a P/E of 14.7x at a last close of $8.43, which sits above insurance peers even though it is below the wider US market.
The P/E ratio compares the company’s share price to its earnings per share, so a higher figure usually means investors are paying more for each dollar of profit. For an insurer like Genworth, that often reflects how investors see the quality and stability of earnings, as well as expectations for future profitability.
Here, the picture is mixed. On one hand, Genworth scores as good value against the broader US market P/E of 18.9x, which suggests the current price is not stretched against general equities. On the other hand, the 14.7x multiple is higher than the US Insurance industry average of 11.6x and higher than its peer average of 11.4x, even as net profit margin sits at 3% compared with 4.2% last year and earnings have declined by 35.3% per year over the past 5 years. That contrast means the market is assigning Genworth a richer earnings tag than many insurers with lower multiples.
For investors, the key question is whether that premium to insurance peers lines up with the company’s earnings profile, including its reported high quality earnings, low 3.6% return on equity and the context of earnings declining 28.2% over the past year. If the sector moves closer to peer or industry averages, Genworth’s P/E could also be pulled toward that level over time.
See what the numbers say about this price — find out in our valuation breakdown.
Result: Price-to-Earnings of 14.7x (OVERVALUED)
However, persistent 3% net margin and earnings declines, alongside long term care and mortgage exposure, could quickly challenge that richer P/E story if sentiment turns.
Find out about the key risks to this Genworth Financial narrative.
Another view: our DCF model is far more cautious
While the P/E of 14.7x suggests Genworth is only a little richer than the wider US market, our DCF model is far less forgiving. It points to a fair value of about $2.22 per share, compared with the current $8.43, which signals a very different risk profile for anyone buying today.
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Genworth Financial for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 49 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
With that mix of caution and potential in mind, do not wait on someone else’s view. Instead, check the underlying data and weigh the 1 key reward and 1 important warning sign for yourself.
Looking for more investment ideas?
If Genworth has you reassessing where your money works hardest, it is worth scanning a few focused stock shortlists that match different investing priorities.
- Target steadier opportunities by checking companies in our 63 resilient stocks with low risk scores that score well on resilience and risk controls.
- Hunt for potential mispriced names using our 49 high quality undervalued stocks built to surface stocks that look cheap against their fundamentals.
- Round out your watchlist with quality payers by reviewing the 16 dividend fortresses that aim to pair higher yields with durability.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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