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Essent Group
(NYSE:ESNT)
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Rating:85Outperform
Price Target:
$81.00
▲(23.19% Upside)
Action:Reiterated
Date:08/08/26
ESNT scores well primarily due to strong financial quality (high profitability, low leverage, and strong cash generation). The technical setup is constructive with price above key moving averages and positive momentum, while valuation remains appealing with a low P/E and a ~2% dividend. The latest earnings call adds support via solid results and aggressive capital returns, tempered by housing-affordability-driven growth limits and some loss/provision and reinsurance-mix volatility.
Positive Factors
Conservative balance sheet
Essent’s balance sheet shows very low leverage and even zero reported debt in the TTM, with healthy statutory capital buffers. This durable capital strength supports claims absorption, dividend flexibility, share repurchases, and access to reinsurance, improving resilience across credit cycles.
Negative Factors
Origination growth constrained
Sustained housing affordability pressures are limiting new insurance-in-force expansion and net written premiums. Over a multi-month horizon this constrains top-line growth potential and forces reliance on pricing, reinsurance expansion, or capital returns rather than organic volume growth to drive earnings.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet
Essent’s balance sheet shows very low leverage and even zero reported debt in the TTM, with healthy statutory capital buffers. This durable capital strength supports claims absorption, dividend flexibility, share repurchases, and access to reinsurance, improving resilience across credit cycles.
Read all positive factors
Essent Group (ESNT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.25B
Dividend Yield1.9%
Average Volume (3M)807.94K
Price to Earnings (P/E)9.6
Beta (1Y)0.54
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. Volume1,070,087
30 Day Avg. Volume807,939
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$74.00Price Target Upside12.55% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)7.4
Revenue Forecast (FY)$1.30B
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 primarily makes money from its private mortgage insurance business. Its core revenue stream is net premiums earned: lenders or borrowers pay insurance premiums (often monthly, sometimes upfront or lender-paid) for coverage that protects the...
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 | 857.18M | 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
Positive
65.75
Price Trends
64.06
Positive
62.12
Positive
61.67
Positive
Market Momentum
1.33
Negative
64.36
Neutral
88.76
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESNT, the sentiment is Positive. The current price of 65.75 is below the 20-day moving average (MA) of 67.05, above the 50-day MA of 64.06, and above the 200-day MA of 61.67, indicating a bullish trend. The MACD of 1.33 indicates Negative momentum. The RSI at 64.36 is Neutral, neither overbought nor oversold. The STOCH value of 88.76 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
85 Outperform | $6.25B | 9.60 | 11.91% | 2.01% | 4.47% | 4.26% | |
84 Outperform | $6.87B | 10.44 | 12.76% | 1.86% | 2.49% | 7.73% | |
82 Outperform | $3.44B | 8.81 | 15.14% | ― | 7.53% | 7.71% | |
81 Outperform | $6.39B | 9.69 | 13.90% | 2.02% | -1.88% | 4.83% | |
74 Outperform | $4.93B | 9.36 | 11.26% | 2.64% | 27.93% | -2.18% | |
71 Outperform | $7.54B | 10.11 | 13.62% | 2.93% | 22.55% | 298.19% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
ESNT
Essent Group
69.43
8.33
13.64%
FAF
First American Financial
73.18
10.43
16.61%
MTG
MGIC Investment
31.11
4.25
15.84%
RDN
Radian Group
37.05
3.18
9.40%
NMIH
NMI Holdings
45.56
6.38
16.28%
ACT
Enact Holdings
49.78
12.65
34.05%
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.