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NMI Holdings (NMIH)
NASDAQ:NMIH
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NMI Holdings
(NASDAQ:NMIH)75Outperform
Positive Factors
Defensive Credit Profile
NMIH has a more defensive credit profile than peers, which suggests the company should perform better than peers from a credit perspective in an economic slowdown.
Valuation
The current valuation of NMIH creates a compelling entry point for investors due to its lower trading price compared to historical averages and peers.
Negative Factors
Interest Rate Sensitivity
NMIH could be an outsized beneficiary of higher refi activity as interest rates decline and borrowers refinance mortgages issued in 2023/24.
NMI Holdings (NMIH) vs. S&P 500 (SPY)
Market Cap
$2.80B
Dividend YieldN/A
Average Volume (3M)527.40K
Price to Earnings (P/E)8.1
Beta (1Y)0.72
Revenue Growth13.40%
EPS Growth18.52%
CountryUS
Employees230
SectorFinancial
Sector Strength93
IndustryInsurance
Share Statistics
EPS (TTM)4.43
Shares Outstanding78,452,095
10 Day Avg. Volume598,315
30 Day Avg. Volume527,403
Financial Highlights & Ratios
PEG Ratio0.53
Price to Book (P/B)N/A
Price to Sales (P/S)4.30
Price to Cash Flow (P/CF)19.50
P/FCF Ratio19.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$43.17Price Target Upside20.55% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
NMI Holdings Business Overview & Revenue Model
Company DescriptionNMI Holdings, Inc. (NMIH) operates as a provider of private mortgage insurance in the United States. The company offers products and services designed to protect mortgage lenders and investors from losses related to borrower defaults, thereby facilitating the sale of low down payment mortgages in the secondary mortgage market. NMIH primarily serves residential mortgage originators, including mortgage banks, commercial banks, and credit unions.
How the Company Makes MoneyNMI Holdings makes money by providing private mortgage insurance to lenders and investors. Its primary revenue stream is the collection of insurance premiums from mortgage lenders, which are paid for coverage against the risk of borrower defaults. The company's earnings are influenced by factors such as the volume of new insurance written, the credit quality of its insured portfolio, and prevailing interest rates. NMIH also benefits from partnerships with financial institutions that originate and service mortgages, allowing it to access a steady stream of new business.
NMI Holdings Financial Statement Overview
Summary
NMI Holdings showcases a robust financial profile with strong revenue growth, high profitability margins, and an improving balance sheet structure. The company effectively manages its cash flows, further strengthening its financial health. While the absence of long-term debt reduces financial risk, it may also limit growth opportunities through leverage. Overall, the company is well-positioned financially within the insurance industry, demonstrating resilience and growth potential.Income Statement
NMI Holdings has demonstrated strong financial performance with consistent revenue growth, marked by a 12.42% increase from 2022 to 2023 and 12.41% from 2021 to 2022. The company maintains high gross and net profit margins, with a net profit margin of 55.30% in 2023. The absence of EBIT and EBITDA margins for 2024 is offset by historical data showing an EBIT margin of 99.65% in 2023, indicative of efficient operations. These factors contribute to a robust financial outlook.88
Very Positive
Balance Sheet
The balance sheet reflects a solid financial structure with zero debt in 2024, which significantly improves the debt-to-equity ratio compared to previous years. The equity ratio has improved to 66.19% in 2024, up from 65.48% in 2023, suggesting strong equity backing. Return on equity is also strong at 16.24% in 2023, though slightly lower than previous years due to increased equity base. The overall stability is commendable, but the absence of debt may also indicate missed leverage opportunities.75
Positive
Cash Flow
NMI Holdings exhibits strong cash flow management with a 18.10% growth in free cash flow from 2022 to 2023. The company maintains favorable ratios, such as a free cash flow to net income ratio of 1.02 in 2023, indicating efficient conversion of profits into cash. Operating cash flow has consistently exceeded net income, with a ratio of 1.07 in 2023, reinforcing sound operational efficiency. The cash flow stability and growth reflect a healthy financial position.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 650.97M | 579.00M | 524.46M | 485.64M | 436.19M | Gross Profit |
| 650.97M | 579.00M | 524.46M | 485.64M | 436.19M | EBIT |
| 32.77B | 577.00M | 398.39M | 294.75M | 214.82M | EBITDA |
| 0.00 | 456.46M | 421.34M | 339.75M | 252.42M | Net Income Common Stockholders |
| 360.11M | 322.11M | 292.90M | 231.13M | 171.57M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 54.31M | 333.29M | 2.14B | 2.16B | 1.93B | Total Assets |
| 3.35B | 2.94B | 2.52B | 2.45B | 2.17B | Total Debt |
| 415.15M | 397.60M | 396.05M | 394.62M | 393.30M | Net Debt |
| -54.31M | 302.24M | 353.80M | 321.14M | 271.92M | Total Liabilities |
| 1.13B | 1.01B | 902.30M | 558.80M | 505.89M | Stockholders Equity |
| 2.22B | 1.93B | 1.61B | 1.57B | 1.37B |
| Cash Flow | Free Cash Flow | |||
| 393.60M | 333.31M | 302.82M | 313.48M | 240.44M | Operating Cash Flow |
| 393.60M | 342.68M | 313.39M | 325.72M | 252.60M | Investing Cash Flow |
| -339.29M | -200.00M | -289.79M | -374.18M | -629.55M | Financing Cash Flow |
| -96.70M | -90.42M | -55.83M | -1.83M | 462.80M |
NMI Holdings Technical Analysis
Negative
35.81
Price Trends
36.75
Negative
37.83
Negative
37.43
Negative
Market Momentum
-0.37
Negative
44.77
Neutral
51.75
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NMIH, the sentiment is Negative. The current price of 35.81 is below the 20-day moving average (MA) of 36.09, below the 50-day MA of 36.75, and below the 200-day MA of 37.43, indicating a bearish trend. The MACD of -0.37 indicates Negative momentum. The RSI at 44.77 is Neutral, neither overbought nor oversold. The STOCH value of 51.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NMIH.
NMI Holdings Risk Analysis
NMI Holdings disclosed 44 risk factors in its most recent earnings report. NMI Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
NMI Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $5.14B | 7.75 | 14.29% | 2.19% | 5.45% | 7.31% | |
80 Outperform | $5.81B | 8.17 | 13.63% | 1.94% | 17.11% | 11.19% | |
75 Outperform | $4.65B | 8.17 | 13.40% | 3.09% | 3.79% | 3.86% | |
75 Outperform | $2.80B | 8.08 | 17.38% | ― | 13.40% | 18.52% | |
71 Outperform | $5.73B | 8.17 | 14.75% | 2.14% | 4.52% | 15.94% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
57 Neutral | $2.78B | 9.85 | 3.87% | ― | -4.81% | -74.30% |
* Financial Sector Average
Performance Comparison
NMIH
NMI Holdings
35.81
6.31
21.39%
GNW
Genworth Financial
6.72
0.41
6.50%
MTG
MGIC Investment
23.74
4.22
21.62%
RDN
Radian Group
31.76
2.79
9.63%
ESNT
Essent Group
55.87
3.06
5.79%
ACT
Enact Holdings
33.86
5.93
21.23%
NMI Holdings Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -7.71% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, record insurance-in-force, and a positive regulatory environment. However, increased claims expenses and slight declines in persistency and expense management were noted. Overall, the positives significantly outweighed the negatives, showcasing a robust position and outlook for National MI.Highlights
Record Insurance-in-Force and Financial Performance
National MI closed 2024 with a record $210.2 billion of high-quality, high-performing primary insurance-in-force and generated record adjusted net income of $365.6 million, up 13% compared to 2023.
Strong New Business and Customer Engagement
The company activated 118 new lenders in 2024, ending the year with over 1,600 active accounts and generating $11.9 billion of NIW volume in Q4, contributing to a total of $46 billion during the year.
Outstanding Credit Performance
The insurance portfolio is the fastest growing, highest quality, and best performing in the MI industry, helping a record number of borrowers gain access to housing.
Efficient Capital Management and Shareholder Returns
Completed a successful debt refinancing as an investment-grade issuer, returned capital through a repurchase program, and achieved a record full-year adjusted return on equity of 17.6%.
Positive Regulatory Environment and Market Conditions
Conversations with policymakers have been active and constructive, with bipartisan recognition of the private mortgage insurance industry’s role in expanding access to homeownership.
Lowlights
Increased Claims Expense
Claims expense in Q4 was $17.3 million compared to $10.3 million in Q3, influenced by new notices related to storm activity like Hurricanes Helene and Milton.
Persistency Decline
Twelve months' persistency was 84.6% in Q4, a slight decline from 85.5% in Q3.
Expense Management Challenges
Underwriting and operating expenses increased to $31.1 million in Q4 compared to $29.2 million in Q3, with an expense ratio of 21.7%.
Company Guidance
During the fourth quarter 2024 earnings call, National MI provided guidance reflecting a robust financial performance and strategic initiatives for 2025. The company reported $46 billion in new insurance written (NIW) volume for the year and $210.2 billion in primary insurance-in-force, with an adjusted net income of $365.6 million, a 13% increase from 2023, and an adjusted earnings per share (EPS) of $4.50, up 17% from the previous year. The adjusted return on equity was 17.6%. For the fourth quarter alone, revenue reached a record $166.5 million, with an adjusted net income of $86.1 million, or $1.07 per diluted share, and an adjusted return on equity of 15.6%. The company also maintained a strong capital position with $3.1 billion in total available assets under PMIERs and a default rate of 1%. Looking ahead, National MI plans to focus on customer service, value-added engagement, and technology leadership, while continuing to prioritize disciplined growth and risk management. They aim to compound book value, deliver mid-teens returns, and distribute excess capital prudently. The company also emphasized their ongoing commitment to shareholder value through a refreshed share repurchase program totaling $330 million.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.