A month has gone by since the last earnings report for NMI Holdings (NMIH Quick QuoteNMIH - Free Report) . Shares have lost about 17.8% 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 the most recent earnings report in order to get a better handle on the important catalysts.

NMI Holdings Q4 Earnings Top, Revenues Miss Estimates

NMI Holdings reported fourth-quarter 2021 operating net income per share of 73 cents, which beat the Zacks Consensus Estimate by 1.4%. The bottom line increased 23.7% year over year.

The quarterly results reflected solid new insurance written volume and an expanded insured portfolio, which aided the insurer in achieving record profitability and delivering solid mid-teen returns.

Operational Update

NMI Holdings’ total operating revenues of $125 million increased 13.6% year over year on higher net premiums earned (up 13%) and net investment income (up 19.8%). Revenues however missed the Zacks Consensus Estimate by 1.5%.

Primary insurance-in-force increased 37% to $152.3 billion.

New insurance written was $18.3 billion, down 7.6% year over year, reflecting a decline in refinancing origination volume year on year.

Underwriting and operating expenses totaled $38.8 million, up 11% year over year. Insurance claims and claim expenses were ($0.5) million against $3.5 million.

The loss ratio was (0.4) against 3.5 in the year-ago quarter.

The adjusted expense ratio of 30.5 improved about 300 basis points year over year while the adjusted combined ratio of 30.1 improved about 700 basis points year over year.

Full-Year Update

Operating net income per share of $2.73 beat the Zacks Consensus Estimate of $2.72. The bottom line increased 24.7% year over year.

Operating revenues of $484 million increased 12% year over year but missed the consensus estimate of $487 million.

The adjusted expense ratio of 30.3 improved 170 basis points.

Financial Update

Book value per share, a measure of net worth, grew 13% year over year to $18.25 as of Dec 31, 2021.

NMI Holdings had $76.6 million in cash and cash equivalents, down 36.6% from 2020 end. The debt balance of $394.6 million increased 0.3% from 2020 end.

Annualized adjusted return on equity was 16.1%, up 100 basis points.

Total PMIERs available assets were $2 billion and net risk-based required assets totaled $1.2 billion at 2021 end.

Share Repurchase Update

The board of directors approved a $125 million worth share buyback program through Dec 31, 2023.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

Currently, NMI Holdings has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision 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.