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NMI Holdings Trades Above 50-Day SMA: Time to Hold NMIH Stock?

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NMI Holdings Inc. (NMIH - Free Report) has been trading above its 50-day simple moving average (SMA), signaling a short-term bullish trend. Its share price as of May 14, 2025, was $37.22, down 12.4% from its 52-week high of $42.49.

The 50-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important as this is the first marker of an uptrend or downtrend.

NMIH Price Movement vs. 50-Day Moving Average

Zacks Investment Research
Image Source: Zacks Investment Research

Attractive Valuation

NMIH shares are trading at a price-to-book multiple of 1.25X, lower than the industry average of 1.52X, the Finance sector’s 4.11X and the Zacks S&P 500 Composite’s 7.8X. The insurer has a Value Score of B. Before valuation expands, it is wise to take a position in the stock.

Shares of RenaissanceRe Holdings Ltd. (RNR - Free Report) , First American Financial Corporation (FAF - Free Report) and Axis Capital Holdings Limited (AXS - Free Report) are also trading at a discount to the industry average.

Zacks Investment Research
Image Source: Zacks Investment Research

With a market capitalization of $2.90 billion, the average volume of shares traded in the last three months was 0.6 million. This insurer has a solid track record of beating earnings estimates in three of the last four quarters and missed in one, the average being 8.17%.

NMIH’s Price Performance

Shares of this property and casualty insurer have gained 10.3% in the past year compared with the industry’s growth of 19.8%, the Finance sector’s return of 16.8% and the S&P 500 composite’s appreciation of 11.1%.

NMIH Lags Industry, Sector and S&P 500 in 1 Year

Zacks Investment Research
Image Source: Zacks Investment Research

NMIH’s Growth Projection Encourages

The Zacks Consensus Estimate for NMI Holdings’ 2025 earnings per share indicates a year-over-year increase of 7.1%. The consensus estimate for revenues is pegged at $686.01 million, implying a year-over-year improvement of 5.4%. 

The consensus estimate for 2026 earnings per share and revenues indicates an increase of 4.7% and 2.6%, respectively, from the corresponding 2024 estimates. 

The expected long-term earnings growth rate is 6.10%, outperforming the industry average of 6.9%. NMI Holdings’ superior primary insurance in-force portfolio generates industry-leading growth. NMIH has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.

NMI Holdings’ Favorable Return on Capital

Return on equity (ROE) for the trailing 12 months was 17.27%, which compared favorably with the industry’s 7.7%. This reflects its efficiency in utilizing shareholders’ funds. 

Key Points to Note for NMIH

NMIH stands to gain from new business opportunities in a growing mortgage insurance market. NMI Holdings’ mortgage insurance portfolio is expected to create a strong foundation for future earnings.

Growth in monthly and single premium policy production is tied to the increased penetration of existing customer accounts. New customer account activation will also drive results. 

In order to enhance its return profile, absorb losses, provide efficient growth capital and mitigate the impact of credit volatility, NMI Holdings has a comprehensive reinsurance program for its in-force portfolio.

To drive margin expansion, NMIH remains focused on efficiency and expense management. NMI Holdings engages in share buybacks and through year-end, NMIH has repurchased a total of $245 million of shares. NMIH has $80 million of repurchase capacity remaining under the existing program.

All these together should help the insurer continue to generate solid mid-teens shareholders’ returns.

Final Take on NMIH Stock

NMI Holdings is well-positioned for growth on new primary insurance written, direct primary insurance in force and a comprehensive reinsurance program. 

NMIH should also benefit from a higher return on capital, favorable growth estimates, as well as the affordability of shares. The stock also has a VGM Score of A. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.

It is, therefore, wise to hold on to this Zacks Rank #3 (Hold) stock at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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