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Essent Group
(NYSE:ESNT)
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Rating:78Outperform
Price Target:
$66.00
▼(-4.35% Downside)
Action:Reiterated
Date:10/01/26
ESNT scores well primarily due to strong underlying financial performance (high profitability, conservative balance sheet, and strong cash generation) and attractive valuation (low P/E with a meaningful dividend). The main drag is weak technical momentum, with the stock trading below key moving averages and showing very oversold readings, while earnings-call commentary remains positive overall but acknowledges near-term operating headwinds.
Positive Factors
Strong profitability and cash generation
High quarterly earnings and substantial operating cash flow indicate that Essent is converting its mortgage insurance franchise into real financial resources. This supports capital resilience, ongoing investment, dividends, and repurchases while providing flexibility through changing housing and credit conditions.
Negative Factors
Affordability limits new business growth
Persistently poor housing affordability can reduce mortgage origination activity and limit new insurance written, slowing expansion of Essent’s Insurance in Force. Even with selective opportunities, constrained volume may restrict premium growth and operating leverage over the coming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong profitability and cash generation
High quarterly earnings and substantial operating cash flow indicate that Essent is converting its mortgage insurance franchise into real financial resources. This supports capital resilience, ongoing investment, dividends, and repurchases while providing flexibility through changing housing and credit conditions.
Read all positive factors
Essent Group (ESNT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.62B
Dividend Yield2.18%
Average Volume (3M)804.75K
Price to Earnings (P/E)8.7
Beta (1Y)0.55
Revenue Growth4.47%
EPS Growth4.26%
CountryUS
Employees518
SectorFinancial
Sector Strength70
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)7.23
Shares Outstanding89,876,495
10 Day Avg. Volume932,384
30 Day Avg. Volume804,753
Financial Highlights & Ratios
PEG Ratio12.91
Price to Book (P/B)1.12
Price to Sales (P/S)5.10
P/FCF Ratio7.58
Enterprise Value/Market Cap1.13
Enterprise Value/Revenue4.81
Enterprise Value/Gross Profit5.66
Enterprise Value/Ebitda7.42
Forecast
1Y Price Target
$74.20Price Target Upside7.54% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)7.5
Revenue Forecast (FY)$1.35B
Essent Group Business Overview & Revenue Model
Company Description
Essent Group Ltd., through its subsidiaries, provides private mortgage insurance and reinsurance, and title insurance and settlement services to mortgage lenders, borrowers, and investors in the United States. It operates through two segments, Mor...
How the Company Makes Money
Essent makes money primarily by underwriting and servicing private mortgage insurance policies on residential mortgage loans. Its core revenue stream is earned premiums: lenders (or, depending on loan structure, borrowers via lender-arranged cover...
Essent Group Earnings Call Summary
Earnings Call Date:Aug 07, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 30, 2026
Earnings Call Sentiment Positive
The call emphasized strong earnings, robust capital and liquidity, portfolio quality metrics, rising investment income and active capital returns (buybacks and dividends). Growth in the reinsurance business and strategic investments provide diversification and optionality. Offsetting items include constrained origination volumes due to affordability, a modest QoQ decline in persistency, higher loss provisions versus the prior year, and near‑term title headwinds. Overall, positive fundamentals and capital flexibility outweigh the modest operational and market headwinds discussed.Positive Updates
Strong Quarterly Earnings and EPS Growth
Net income of $190 million in Q2 2026, or $2.08 per diluted share (up from $1.82 last quarter, +14.3% QoQ, and up from $1.93 year-ago, +7.8% YoY). Annualized return on average equity of 13.4%.
Negative Updates
Affordability Constrains New Business Growth
Management expects portfolio growth to remain in a pause as housing affordability constrains origination volumes; Insurance in Force growth modest (+~1% YoY), limiting NIW expansion despite selective pockets of opportunity.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Quarterly Earnings and EPS Growth
Net income of $190 million in Q2 2026, or $2.08 per diluted share (up from $1.82 last quarter, +14.3% QoQ, and up from $1.93 year-ago, +7.8% YoY). Annualized return on average equity of 13.4%.
Read all positive updates
Company Guidance
Management's guidance and forward-looking metrics included: P&C reinsurance written premium of approximately $320 million for 2026 (roughly half to be earned this year) with that P&C activity expected to run at a combined ratio in the high‑90s; mortgage insurance premium yield guided to about 40 basis points for the year (Q2 average base premium 40 bps; average net premium 35 bps; Q2 MI premium earned $216M); Q3 common dividend of $0.35 per share and continued buybacks (year‑to‑date through July 31 repurchased nearly 6.0M shares for ≈$350M; Q2 repurchases 3.2M for $191M); holding company liquidity and capital optionality (consolidated cash & investments $6.6B; GAAP equity $5.7B; $1.1B cash/investments at holding companies; $500M undrawn revolver capacity; $500M senior notes outstanding; debt‑to‑capital 8%; access to $1.0B excess‑of‑loss reinsurance); Essent Guaranty statutory metrics and dividend capacity (statutory capital $3.7B; risk‑to‑capital 8.5:1; PMIERs sufficiency 172% with $1.5B excess available assets; $2.7B contingency reserves; as of July 1 can pay an additional $302M of ordinary dividends in 2026); portfolio and performance pointers that frame guidance (Insurance‑in‑Force ≈$250B with 12‑month persistency 84%; weighted average credit score 747; original weighted average LTV 93%; Q2 default rate 2.53%; Q2 net income $190M or $2.08 diluted; Q2 annualized aggregate investment yield 4.9%; other invested assets ≈$450M or ~7% of the portfolio; trailing 12‑month operating cash flow $834M).Essent Group Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
83
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.32B | 1.26B | 1.27B | 1.13B | 1.02B | 1.03B |
| Gross Profit | 1.13B | 1.11B | 1.19B | 1.10B | 1.19B | 997.45M |
| EBITDA | 858.38M | 859.79M | 896.59M | 857.66M | 1.01B | 833.98M |
| Net Income | 680.71M | 689.97M | 729.40M | 696.39M | 831.35M | 681.78M |
Balance Sheet | ||||||
| Total Assets | 7.59B | 7.44B | 7.11B | 6.43B | 5.72B | 5.72B |
| Cash, Cash Equivalents and Short-Term Investments | 6.11B | 6.23B | 6.01B | 141.79M | 333.27M | 5.04B |
| Total Debt | 495.97M | 495.30M | 493.96M | 421.92M | 420.86M | 419.82M |
| Total Liabilities | 1.93B | 1.68B | 1.51B | 1.32B | 1.26B | 1.49B |
| Stockholders Equity | 5.66B | 5.76B | 5.60B | 5.10B | 4.46B | 4.24B |
Cash Flow | ||||||
| Free Cash Flow | 825.89M | 848.69M | 854.77M | 759.00M | 584.84M | 706.76M |
| Operating Cash Flow | 834.08M | 856.05M | 861.53M | 763.00M | 588.82M | 709.26M |
| Investing Cash Flow | -117.16M | -154.74M | -706.93M | -525.57M | -398.87M | -583.17M |
| Financing Cash Flow | -734.71M | -709.75M | -164.91M | -176.88M | -190.20M | -147.43M |
Essent Group Technical Analysis
Neutral
69.00
Price Trends
66.44
Negative
64.02
Negative
62.29
Positive
Market Momentum
-1.49
Negative
42.89
Neutral
79.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESNT, the sentiment is Neutral. The current price of 69 is above the 20-day moving average (MA) of 63.99, above the 50-day MA of 66.44, and above the 200-day MA of 62.29, indicating a neutral trend. The MACD of -1.49 indicates Negative momentum. The RSI at 42.89 is Neutral, neither overbought nor oversold. The STOCH value of 79.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ESNT.
Essent Group Risk Analysis
Essent Group disclosed 51 risk factors in its most recent earnings report. Essent Group 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
Essent Group Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $6.32B | 9.66 | 12.76% | 1.96% | 2.49% | 7.73% | |
78 Outperform | $5.62B | 8.65 | 11.91% | 2.18% | 4.47% | 4.26% | |
77 Outperform | $3.01B | 7.77 | 15.14% | ― | 7.53% | 7.71% | |
74 Outperform | $4.49B | 8.56 | 11.26% | 3.01% | 27.93% | -2.18% | |
72 Outperform | $5.63B | 8.54 | 13.90% | 2.26% | -1.88% | 4.83% | |
71 Outperform | $6.25B | 8.50 | 13.62% | 3.69% | 22.55% | 298.19% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
ESNT
Essent Group
62.49
4.54
7.84%
FAF
First American Financial
61.20
4.17
7.30%
MTG
MGIC Investment
27.43
1.06
4.04%
RDN
Radian Group
33.93
1.55
4.79%
NMIH
NMI Holdings
40.01
4.33
12.14%
ACT
Enact Holdings
45.97
10.99
31.43%
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.