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NMI Holdings (NMIH)
NASDAQ:NMIH
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NMI Holdings
(NASDAQ:NMIH)
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Rating:77Outperform
Price Target:
$44.00
▲(21.28% Upside)
NMI Holdings demonstrates strong financial performance and positive earnings call sentiment, which are the most significant factors driving the score. The company's robust profitability and efficient operations are complemented by an attractive valuation. Technical analysis presents mixed signals, but the overall outlook remains positive.
Positive Factors
Strong Financial Performance
Record-breaking revenue indicates robust demand for NMI Holdings' services, reflecting strong market positioning and effective business strategies.
Efficient Operations
A low expense ratio demonstrates operational efficiency, enhancing profitability and providing a competitive edge in cost management.
Strong Balance Sheet
A strong balance sheet with low leverage ensures financial stability, enabling the company to withstand economic fluctuations and invest in growth opportunities.
Negative Factors
Macro Risks
Ongoing macroeconomic risks could impact NMI Holdings' future performance, requiring careful management of pricing and risk selection strategies.
Limited Impact of MI Tax Deduction
The limited impact of the MI tax deduction reduces potential tax relief benefits, potentially affecting the attractiveness of mortgage insurance products.
Persistency Rate Slight Decline
A slight decline in persistency rate, while still high, could indicate challenges in maintaining customer retention over time, affecting long-term revenue stability.
NMI Holdings (NMIH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.77B
Dividend YieldN/A
Average Volume (3M)386.18K
Price to Earnings (P/E)7.7
Beta (1Y)0.66
Revenue Growth9.99%
EPS Growth11.47%
CountryUS
Employees230
SectorFinancial
Sector Strength70
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)1.22
Shares Outstanding77,574,120
10 Day Avg. Volume394,658
30 Day Avg. Volume386,178
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.36
Enterprise Value/Revenue5.53
Enterprise Value/Gross Profit5.68
Enterprise Value/Ebitda7.24
Forecast
1Y Price Target
$44.80Price Target Upside23.48% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
NMI Holdings Business Overview & Revenue Model
Company DescriptionNMI Holdings, Inc. provides private mortgage guaranty insurance services in the United States. The company offers mortgage insurance services; and outsourced loan review services to mortgage loan originators. It serves national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, internet-sourced lenders, and other non-bank lenders. NMI Holdings, Inc. was incorporated in 2011 and is headquartered in Emeryville, California.
How the Company Makes MoneyNMI Holdings generates revenue primarily through the issuance of private mortgage insurance policies. The company earns premium income from mortgage insurers, which is calculated based on the amount of coverage provided and the risk associated with the underlying mortgage loans. Additionally, NMIH collects fees for its risk management services, which may include consulting and analytics services to help lenders manage their mortgage portfolios effectively. The company's revenue is also supported by its strategic partnerships with various lending institutions, which ensure a steady flow of business. Factors contributing to its earnings include the overall health of the housing market, interest rates, and the demand for mortgage financing.
NMI Holdings Earnings Call Summary
Earnings Call Date:Jul 29, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance with record-breaking revenue, high NIW volume, and recognition as a Great Place to Work. Despite these positives, there are ongoing macro risks and the impact of the MI tax deduction may be limited due to the number of filers who itemize. Overall, the strong performance metrics and achievements outweigh the challenges mentioned.Q2-2025 Updates
Positive Updates
Record-Breaking Revenue
Total revenue in the second quarter was a record $173.8 million, up from $173.2 million in the first quarter and $162.1 million in the second quarter of 2024.
Strong New Insurance Written (NIW) Volume
Generated $12.5 billion of NIW volume and ended the period with a record $214.7 billion of high-quality, high-performing primary insurance in force.
Recognized as a Great Place to Work
National MI was recognized as a Great Place To Work for the tenth consecutive year, earning a Decade of Great distinction.
Improved Expense Ratio
The expense ratio was a record low 19.8% in the quarter, highlighting significant operating leverage and cost management success.
High Persistency Rate
12-month persistency remained high at 84.1%, slightly down from 84.3% in the first quarter but above historical trends.
Strong Investment Income
Investment income in the second quarter was $24.9 million, up from $23.7 million in the first quarter and $20.7 million in the second quarter of 2024.
Negative Updates
Macro Risks Remain
Despite strong performance, there are ongoing macro risks, and a proactive stance on pricing, risk selection, and reinsurance decisioning is maintained.
Decline in Default Rate
Default rate declined to 1% at quarter end, with 6,709 defaults at June 30 compared to 6,859 at March 31, indicating a slight decrease in defaults.
Limited Impact of MI Tax Deduction
The permanent renewal of the mortgage insurance premium tax deduction is expected to deliver meaningful tax relief, but only about 10% of filers itemize, limiting its impact.
Company Guidance
During the second quarter of 2025, National MI delivered strong financial performance with $12.5 billion in new insurance written (NIW) and a record $214.7 billion in primary insurance in force. The company reported total revenue of $173.8 million, adjusted net income of $96.5 million, and an adjusted return on equity of 16.3%. National MI's persistency rate was 84.1%, while net premiums earned reached $149.1 million. The core yield stood at 34.2 basis points, and the company achieved an expense ratio of 19.8%. With total cash and investments of $3 billion, including $169 million at the holding company, National MI maintained a robust balance sheet. Shareholders’ equity was reported at $2.4 billion, with a book value per share of $31.14. During the quarter, 628,000 shares were repurchased at an average price of $36.90, leaving $281 million of repurchase capacity. Despite macroeconomic risks, the company remains optimistic about its disciplined approach to pricing, risk selection, and reinsurance, as well as the ongoing market opportunities.NMI Holdings Financial Statement Overview
Summary
NMI Holdings exhibits strong financial health with robust revenue growth, high profitability margins, a stable balance sheet, and efficient cash flow management. The company's financial performance indicates a well-managed business with a solid foundation for future growth. Potential risks include maintaining growth momentum and optimizing asset utilization.Income Statement
NMI Holdings has demonstrated strong financial performance as evidenced by its increasing revenue and profitability. The gross profit margin remained consistently high, with a TTM gross profit margin of 99.33%. The net profit margin for the TTM period was 55.93%, reflecting effective cost management. Revenue growth has been robust, with a notable increase of 16.61% from 2023 to 2024. The EBIT margin was 72.95%, and the EBITDA margin stood at 78.62%, indicating strong operational efficiency. Overall, the company exhibits solid growth and profitability trends.88
Very Positive
Balance Sheet
The balance sheet of NMI Holdings shows a healthy financial position with a debt-to-equity ratio of 0.18, suggesting conservative leverage. The return on equity (ROE) for the TTM period was 16.09%, indicating efficient use of equity capital. The equity ratio was 67.17%, underscoring financial stability. While the balance sheet is strong, there is room for improvement in asset utilization.82
Very Positive
Cash Flow
NMI Holdings has demonstrated strong cash flow performance, with a free cash flow growth rate of -1.15% year over year, indicating stability in cash generation. The operating cash flow to net income ratio was 1.03, suggesting healthy cash flow relative to profit. The free cash flow to net income ratio was 1.02, reflecting effective conversion of earnings to cash. Overall, the company's cash flow management appears robust, supporting its operations and growth initiatives.85
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 679.62M | 650.97M | 579.00M | 524.46M | 485.64M | 436.19M |
| Gross Profit | 661.70M | 650.97M | 579.00M | 524.46M | 485.64M | 436.19M |
| EBITDA | 519.52M | 512.24M | 456.46M | 421.34M | 339.75M | 252.42M |
| Net Income | 377.69M | 360.11M | 322.11M | 292.90M | 231.13M | 171.57M |
Balance Sheet | ||||||
| Total Assets | 3.59B | 3.35B | 2.94B | 2.52B | 2.45B | 2.17B |
| Cash, Cash Equivalents and Short-Term Investments | 84.01M | 54.22M | 95.35M | 42.25M | 73.48M | 121.38M |
| Total Debt | 416.07M | 415.15M | 397.60M | 396.05M | 394.62M | 393.30M |
| Total Liabilities | 1.17B | 1.13B | 1.01B | 902.30M | 884.79M | 797.08M |
| Stockholders Equity | 2.42B | 2.22B | 1.93B | 1.61B | 1.57B | 1.37B |
Cash Flow | ||||||
| Free Cash Flow | 394.67M | 386.70M | 333.31M | 302.82M | 313.48M | 240.44M |
| Operating Cash Flow | 393.75M | 393.60M | 342.68M | 313.39M | 325.72M | 252.60M |
| Investing Cash Flow | -268.71M | -339.29M | -200.00M | -289.79M | -374.18M | -629.55M |
| Financing Cash Flow | -103.66M | -96.70M | -90.42M | -55.83M | -1.83M | 462.80M |
NMI Holdings Technical Analysis
Negative
36.28
Price Trends
38.68
Negative
39.12
Negative
37.63
Negative
Market Momentum
-0.92
Positive
36.21
Neutral
16.79
Positive
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 36.28 is below the 20-day moving average (MA) of 37.69, below the 50-day MA of 38.68, and below the 200-day MA of 37.63, indicating a bearish trend. The MACD of -0.92 indicates Positive momentum. The RSI at 36.21 is Neutral, neither overbought nor oversold. The STOCH value of 16.79 is Positive, 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $4.52B | 8.40 | 13.07% | 2.97% | 0.24% | 3.14% | |
77 Outperform | $2.77B | 7.70 | 16.91% | ― | 9.99% | 11.47% | |
76 Outperform | $6.16B | 8.76 | 14.85% | 1.95% | 3.26% | 12.70% | |
74 Outperform | $3.86B | 8.83 | 8.38% | 1.62% | 5.89% | -27.45% | |
73 Outperform | $5.22B | 8.04 | 13.47% | 2.21% | 3.15% | 5.70% | |
71 Outperform | $5.83B | 8.63 | 12.94% | 1.99% | 4.79% | -0.76% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
NMIH
NMI Holdings
36.28
-4.90
-11.90%
AGO
Assured Guaranty
82.28
0.08
0.10%
MTG
MGIC Investment
27.66
2.29
9.03%
RDN
Radian Group
33.96
0.08
0.24%
ESNT
Essent Group
60.66
-1.74
-2.79%
ACT
Enact Holdings
36.34
0.74
2.08%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.