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NMI Holdings (NMIH) Down 1.4% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for NMI Holdings (NMIH - Free Report) . Shares have lost about 1.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NMI Holdings due for a breakout? 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 Q3 Earnings Top, Revenues Miss Estimates
NMI Holdings reported third-quarter 2022 operating net income per share of 90 cents, which beat the Zacks Consensus Estimate by 9.8%. The bottom line increased 9.8% year over year.
The quarterly results reflected significant new business production and increasing persistency, which drove growth in the company’s high-quality insured portfolio. Favorable credit performance and expense discipline led to record profitability and strong returns.
Operational Update
NMI Holdings’ total operating revenues of $130.6 million increased 5.3% year over year on higher net premiums earned (up 4%) and net investment income (up 21.5%). Revenues missed the Zacks Consensus Estimate by 2.5%. Primary insurance-in-force increased 24.8% to $179.2 billion. Annual persistency was 80.1%, up 2200 basis points year over year.
New insurance written was $17.2 billion, down 27% year over year, reflecting a decline in refinancing origination volume year on year. Underwriting and operating expenses totaled $27.1 million, down 21.9% year over year. Insurance claims reflected a benefit of $3.4 million against an expense of $3.2 million in the year-ago quarter.
The loss ratio was 2.9 versus 2.5 in the year-ago quarter. The adjusted expense ratio of 22.9 improved 610 basis points year over year. Adjusted combined ratio of 20.1 improved 1170 basis points year over year.
Financial Update
Book value per share, a measure of net worth, was up about 3% year over year to $18.21 as of Sep 30, 2022. NMI Holdings had $125.8 million in cash and cash equivalents, up 64.1% from 2021 end. The debt balance of $395.7 million increased 0.3% from 2021 end.
Annualized adjusted return on equity was 20.1%, up 350 basis points. Total PMIERs available assets were $2.3 billion and net risk-based required assets totaled $1.2 billion at third-quarter 2022 end.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
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 20% 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, Axis Capital (AXS - Free Report) , has gained 6.7% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
Axis Capital reported revenues of $1.08 billion in the last reported quarter, representing a year-over-year change of -18.5%. EPS of $0.03 for the same period compares with $0.01 a year ago.
For the current quarter, Axis Capital is expected to post earnings of $1.63 per share, indicating a change of -23.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.1% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Axis Capital. Also, the stock has a VGM Score of A.
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NMI Holdings (NMIH) Down 1.4% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for NMI Holdings (NMIH - Free Report) . Shares have lost about 1.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NMI Holdings due for a breakout? 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 Q3 Earnings Top, Revenues Miss Estimates
NMI Holdings reported third-quarter 2022 operating net income per share of 90 cents, which beat the Zacks Consensus Estimate by 9.8%. The bottom line increased 9.8% year over year.
The quarterly results reflected significant new business production and increasing persistency, which drove growth in the company’s high-quality insured portfolio. Favorable credit performance and expense discipline led to record profitability and strong returns.
Operational Update
NMI Holdings’ total operating revenues of $130.6 million increased 5.3% year over year on higher net premiums earned (up 4%) and net investment income (up 21.5%). Revenues missed the Zacks Consensus Estimate by 2.5%.
Primary insurance-in-force increased 24.8% to $179.2 billion. Annual persistency was 80.1%, up 2200 basis points year over year.
New insurance written was $17.2 billion, down 27% year over year, reflecting a decline in refinancing origination volume year on year. Underwriting and operating expenses totaled $27.1 million, down 21.9% year over year. Insurance claims reflected a benefit of $3.4 million against an expense of $3.2 million in the year-ago quarter.
The loss ratio was 2.9 versus 2.5 in the year-ago quarter. The adjusted expense ratio of 22.9 improved 610 basis points year over year. Adjusted combined ratio of 20.1 improved 1170 basis points year over year.
Financial Update
Book value per share, a measure of net worth, was up about 3% year over year to $18.21 as of Sep 30, 2022. NMI Holdings had $125.8 million in cash and cash equivalents, up 64.1% from 2021 end. The debt balance of $395.7 million increased 0.3% from 2021 end.
Annualized adjusted return on equity was 20.1%, up 350 basis points. Total PMIERs available assets were $2.3 billion and net risk-based required assets totaled $1.2 billion at third-quarter 2022 end.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
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 20% 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, Axis Capital (AXS - Free Report) , has gained 6.7% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
Axis Capital reported revenues of $1.08 billion in the last reported quarter, representing a year-over-year change of -18.5%. EPS of $0.03 for the same period compares with $0.01 a year ago.
For the current quarter, Axis Capital is expected to post earnings of $1.63 per share, indicating a change of -23.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.1% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Axis Capital. Also, the stock has a VGM Score of A.