It has been about a month since the last earnings report for NMI Holdings (NMIH). Shares have added about 5.8% 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 drivers.
NMI Holdings Q3 Earnings, Revenues Top Estimates, Premiums Up Y/Y
NMI Holdings reported third-quarter 2024 operating net income per share of $1.15, which beat the Zacks Consensus Estimate by 4.6%. The bottom line increased 15% year over year. The quarterly results reflected higher premiums and net investment income, and increased persistency, which drove growth in the company’s high-quality insured portfolio.
NMI Holdings’ total operating revenues of $166 million increased 12.3% year over year on higher net premiums earned (up 10.2%) and net investment income (up 25.8%). Revenues beat the Zacks Consensus Estimate by 0.7%.
Primary insurance in force increased 6.5% to $207.5 billion. Annual persistency was 85.5%, up 10 basis points (bps) year over year. New insurance written was $12.2 billion, down 2% year over year.
Underwriting and operating expenses totaled $29.2 million, up 5.1% year over year. Insurance claims and claim expenses were $10.3 million, more than doubling year over year. The loss ratio was 7.2, which deteriorated 350 bps.
The adjusted expense ratio of 20.1 deteriorated 20 bps year over year, while the adjusted combined ratio of 27.5 fell 720 bps.
Book value per share, a measure of net worth, was up 7.8% year over year to $27.67 as of Sept. 30, 2024. NMI Holdings had $133.3 million in cash and cash equivalents, which decreased 37.9% from 2023 end. The debt balance of $414.5 million increased 4.3% from the end of 2023.
The annualized adjusted return on equity was 17.5%, which contracted 150 bps year over year. Total PMIERs available assets were $3 billion. Net risk-based required assets totaled $1.7 billion at the end of third-quarter 2024.
It turns out, fresh estimates have trended downward during the past month.
At this time, NMI Holdings has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile 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.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, NMI Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
NMI Holdings belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, CNA Financial (CNA), has gained 4.6% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
CNA Financial reported revenues of $3.23 billion in the last reported quarter, representing a year-over-year change of +8.8%. EPS of $1.08 for the same period compares with $1.06 a year ago.
CNA Financial is expected to post earnings of $1.11 per share for the current quarter, representing a year-over-year change of -16.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -4.3%.
CNA Financial has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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