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NMI Holdings (NMIH) Up 5.1% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for NMI Holdings (NMIH - Free Report) . Shares have added about 5.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is NMI Holdings due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
NMI Holdings Q2 Earnings and Revenues Top, Rise Y/Y
NMI Holdings reported second-quarter 2021 operating net income per share of 67 cents, which beat the Zacks Consensus Estimate by 6.4%. The bottom line increased 67.5% year over year. Quarterly performance benefited from significant new business production, strong growth in high quality and shared portfolio and record financial results.
Operational Update
NMI Holdings recorded total operating revenues of $121 million, which increased 12% year over year on higher net premiums earned (up 12%) and net investment income (up 32.7%). Revenues beat the Zacks Consensus Estimate by about 1%.
Primary insurance-in-force increased 38% to $136.6 billion. New insurance written was $22.6 billion, up 73.4% year over year. Annual persistency was 53.9%, down from 64.1% in the year-ago quarter.
Net underwriting and operating expenses totaled $34.7 million, up 14.1% year over year. Insurance claims and claim expenses were $4.6 million, down 86.6%.
Loss ratio was 4.2, which improved 3050 basis points year over year. Expense ratio of 31.3 deteriorated 60 basis points year over year while combined ratio of 35.5 improved 2990 basis points year over year.
Financial Update
Book value per share, a measure of net worth, grew 15% year over year to $17.03 as of Jun 30, 2021. NMI Holdings had $2.1 billion in cash and investments, up 11% from 2020 end. Debt balance of $393.9 million increased 0.2% from 2020 end.
Annualized adjusted return on equity was 16.4%, up 570 basis points. Total PMIERs available assets were $1.9 billion and net risk-based required assets totaled $1.2 billion at second-quarter 2021 end.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 9.79% due to these changes.
VGM Scores
Currently, NMI Holdings has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, NMI Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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NMI Holdings (NMIH) Up 5.1% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for NMI Holdings (NMIH - Free Report) . Shares have added about 5.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is NMI Holdings due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
NMI Holdings Q2 Earnings and Revenues Top, Rise Y/Y
NMI Holdings reported second-quarter 2021 operating net income per share of 67 cents, which beat the Zacks Consensus Estimate by 6.4%. The bottom line increased 67.5% year over year. Quarterly performance benefited from significant new business production, strong growth in high quality and shared portfolio and record financial results.
Operational Update
NMI Holdings recorded total operating revenues of $121 million, which increased 12% year over year on higher net premiums earned (up 12%) and net investment income (up 32.7%). Revenues beat the Zacks Consensus Estimate by about 1%.
Primary insurance-in-force increased 38% to $136.6 billion. New insurance written was $22.6 billion, up 73.4% year over year. Annual persistency was 53.9%, down from 64.1% in the year-ago quarter.
Net underwriting and operating expenses totaled $34.7 million, up 14.1% year over year. Insurance claims and claim expenses were $4.6 million, down 86.6%.
Loss ratio was 4.2, which improved 3050 basis points year over year. Expense ratio of 31.3 deteriorated 60 basis points year over year while combined ratio of 35.5 improved 2990 basis points year over year.
Financial Update
Book value per share, a measure of net worth, grew 15% year over year to $17.03 as of Jun 30, 2021. NMI Holdings had $2.1 billion in cash and investments, up 11% from 2020 end. Debt balance of $393.9 million increased 0.2% from 2020 end.
Annualized adjusted return on equity was 16.4%, up 570 basis points. Total PMIERs available assets were $1.9 billion and net risk-based required assets totaled $1.2 billion at second-quarter 2021 end.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 9.79% due to these changes.
VGM Scores
Currently, NMI Holdings has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, NMI Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.