It has been about a month since the last earnings report for NMI Holdings (NMIH Quick QuoteNMIH - Free Report) . Shares have added about 1.1% 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 its most recent earnings report in order to get a better handle on the important catalysts.

NMI Holdings Q1 Earnings Beat, Revenues Rise Y/Y

NMI Holdings NMIH reported first-quarter 2022 operating net income per share of 77 cents, which beat the Zacks Consensus Estimate by 2.7%. The bottom line increased 24.2% year over year.

The quarterly results reflected new business production and improving persistency, which drove growth in the high-quality insured portfolio, and favorable credit performance that led to significant profitability and strong mid-teen returns.

Operational Update

NMI Holdings’ total operating revenues of $127.4 million increased 10.6% year over year on higher net premiums earned (up 10%) and net investment income (up 15.7%). Revenues beat the Zacks Consensus Estimate by 0.9%.

Primary insurance-in-force increased 28% to $158.9 billion.

New insurance written was $14.2 billion, down 46% year over year, reflecting a decline in refinancing origination volume year on year.

Underwriting and operating expenses totaled $32.9 million, down 3% year over year. Insurance claims were a benefit of $0.6 million against an expense of $5 million.

The loss ratio was (0.5) against 4.7 in the year-ago quarter.

The adjusted expense ratio of 30.5 improved 28 basis points year over year while the adjusted combined ratio of 27.5 improved 900 basis points year over year.

Financial Update

Book value per share, a measure of net worth, was down 2.2% year over year to $17.84 as of Mar 31, 2022.

NMI Holdings had $130.9 million in cash and cash equivalents, up 70.8% from 2021 end. The debt balance of $394.6 million increased 0.1% from 2021 end.

Annualized adjusted return on equity was 17.4%, up 190 basis points.

Total PMIERs available assets were $2.1 billion and net risk-based required assets totaled $1.3 billion at first-quarter 2022 end.
Reinsurance Agreement Inked

NMIH entered into a $290 million excess of loss reinsurance agreement with a high-quality panel of third-party reinsurers, covering an existing portfolio of mortgage insurance policies written primarily from Oct 1, 2021 through Mar 31, 2022.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

Currently, NMI Holdings has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, 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

NMI Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

NMI Holdings belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, RLI Corp. (RLI Quick QuoteRLI - Free Report) , has gained 3.8% over the past month. More than a month has passed since the company reported results for the quarter ended March 2022.

RLI Corp. reported revenues of $287.04 million in the last reported quarter, representing a year-over-year change of +17.2%. EPS of $1.43 for the same period compares with $0.87 a year ago.

For the current quarter, RLI Corp. is expected to post earnings of $0.99 per share, indicating a change of -9.2% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

RLI Corp. has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.