Yahoo Finance NMI Holdings (NMIH) Up 41.4% in a Year: Will the Rally Last?
NMI Holdings Inc.’s NMIH shares have rallied 41.4% in a year compared with the industry's growth of 31.8%. The Finance sector and the Zacks S&P 500 composite have risen 24.3% and 27.1%, respectively, in the same time frame. With a market capitalization of $2.51 billion, the average volume of shares traded in the last three months was 0.5 million.
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The rally was largely driven by new business production, growth in the capital and reinsurance markets, improved total mortgage origination volume and flexible liquidity.
This Zacks Rank #3 (Hold) insurer has a solid track record of beating earnings estimates in each of the last four quarters, the average being 6.06%.
The Zacks Consensus Estimate for 2024 and 2025 earnings has moved 0.4% and 1.1% north, respectively, in the past 60 days, reflecting analysts’ optimism on the stock.
Will the Bull Run Continue?
The Zacks Consensus Estimate for NMIH’s 2024 earnings per share indicates a year-over-year increase of 5.2% from the consensus estimate of 2023. The consensus estimate for revenues is pegged at $623.22 million, implying a year-over-year improvement of 7.6% from the consensus mark of 2023.
The consensus estimate for 2025 earnings per share indicates a year-over-year increase of 9.8% from the consensus estimate of 2024. The consensus estimate for 2025 revenues is pinned at $655.18 million, implying a year-over-year improvement of 5.1% from the consensus mark of 2024.
This property and casualty insurer continues to benefit from business production, robust growth in high-quality and short portfolios, and continued success in the capital and reinsurance markets.
New insurance written (NIW) — the primary driver of insurance-in-force (IIF) of National MI — is expected to improve by virtue of the resiliency and stability of the housing market, growth in total mortgage origination volume and increasing size of the U.S. mortgage insurance market. Also, the continued expansion of customer franchise, and growth in monthly and single-premium policy production tied to the rise in customer franchise and market presence are expected to drive NIW of NMIH.
NMI Holdings expects persistency to continue improving and driving further increases in the embedded portfolio value for the year. NMIH remains well-poised to gain from a rise in IIF, increased policy pricing and higher single-premium policy cancellations, which continue to contribute to net premiums earned, one of the major determinants of revenue growth.
Net investment income is expected to improve as the company will roll over more maturities at favorable and higher rates.
NMI Holdings boasts a strong capital position, and had total PMIERs available assets of $2.7 billion and net risk-based required assets of $1.5 billion at the fourth-quarter end. During the year ended Dec 31, 2023, NMIH repurchased 3.5 million shares for $92.3 million. Currently, the insurer has $176.9 million remaining under authorization.
Stocks to Consider
Some better-ranked stocks from the insurance space are HCI Group, Inc. HCI, Palomar Holdings, Inc. PLMR and Axis Capital Holdings Limited AXS. While HCI Group and Palomar Holdings sport a Zacks Rank #1 (Strong Buy) each, Axis Capital carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
HCI Group has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 522.51%. In the past year, shares of HCI have surged 122.5%.
The Zacks Consensus Estimate for HCI’s 2024 and 2025 earnings implies year-over-year growth of 37.9% and 11.6%, respectively, from the consensus estimate of the corresponding years.
Palomar Holdings has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 11.12%. In the past year, shares of PLMR have soared 48.3%.
The Zacks Consensus Estimate for PLMR’s 2024 and 2025 earnings implies year-over-year growth of 16.2% and 18%, respectively, from the consensus estimate of the corresponding years.
Axis Capital has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 102.57%. In the past year, shares of AXS have gained 19.8%.
The Zacks Consensus Estimate for AXS’ 2024 and 2025 earnings implies year-over-year growth of 3% and 10%, respectively, from the consensus estimate of the corresponding years.
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