NMI (NASDAQ:NMIH) Announces Quarterly Earnings Results, Misses Estimates By $0.07 EPS

Key Points

• NMI reported quarterly EPS of $1.23, missing the $1.30 consensus estimate by $0.07, while revenue of $187.55 million topped the $159.20 million estimate.
• National MI wrote $13.6 billion of new insurance and ended the quarter with a record $229.7 billion of insurance in force. New reinsurance agreements provide coverage for business written through 2030 at an estimated 4% pre-tax cost of capital.
• Defaults rose to 8,571 from 8,020 in the prior quarter, and claims expense increased to $29.1 million from $13.1 million; management attributed the rise to seasonality and portfolio growth and seasoning.

NMI (NASDAQ:NMIH - Get Free Report) announced its quarterly earnings data on Thursday. The financial services provider reported $1.23 earnings per share (EPS) for the quarter, missing the consensus estimate of $1.30 by ($0.07), FiscalAI reports. The firm had revenue of $187.55 million during the quarter, compared to the consensus estimate of $159.20 million. NMI had a return on equity of 15.13% and a net margin of 54.10%. During the same period last year, the company earned $1.21 EPS.

Here are the key takeaways from NMI's conference call:

• National MI generated $13.6 billion of new insurance written and ended the quarter with record insurance-in-force of $229.7 billion. Revenue was $187.5 million, while adjusted net income was $93.7 million, or $1.23 per diluted share.
• New quota-share and excess-of-loss reinsurance treaties provide forward-flow coverage for business written through 2030 at an estimated 4% pre-tax cost of capital. Management said the deals strengthen credit-risk protection and capital planning, but do not directly change gross-line pricing.
• Defaults increased to 8,571 from 8,020 in the prior quarter, and claims expense rose to $29.1 million from $13.1 million. Management attributed the increase to normal seasonality and portfolio growth and seasoning, while describing credit trends as in line with expectations.
• The company repurchased $27.1 million of stock during the quarter and has $140 million of authorization remaining, but management expects buybacks to continue at roughly the recent pace rather than accelerate. It cited ongoing balance-sheet and growth opportunities as factors in balancing shareholder distributions.

NMI Stock Up 0.7%

Shares of NASDAQ NMIH traded up $0.31 during midday trading on Thursday, reaching $44.27. 972,894 shares of the company's stock traded hands, compared to its average volume of 873,318. The company has a quick ratio of 0.65, a current ratio of 0.65 and a debt-to-equity ratio of 0.15. The stock's 50 day simple moving average is $42.14 and its 200-day simple moving average is $40.36. NMI has a one year low of $35.12 and a one year high of $46.74. The company has a market cap of $3.33 billion, a price-to-earnings ratio of 8.71, a P/E/G ratio of 1.44 and a beta of 0.52.

Analyst Upgrades and Downgrades

NMIH has been the subject of several research reports. Bank of America cut NMI from a "buy" rating to a "neutral" rating and lowered their target price for the stock from $51.00 to $44.00 in a report on Friday, October 30th. BTIG Research started coverage on NMI in a research report on Tuesday, September 22nd. They set a "buy" rating and a $54.00 price target on the stock. Weiss Ratings lowered NMI from a "buy (b+)" rating to a "buy (b)" rating in a research note on Tuesday. JPMorgan Chase & Co. decreased their price objective on NMI from $50.00 to $45.00 and set an "overweight" rating for the company in a report on Monday, October 12th. Finally, Royal Bank Of Canada restated an "outperform" rating and issued a $53.00 price objective on shares of NMI in a report on Tuesday, August 4th. Five research analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the stock. According to data from MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and a consensus price target of $47.88.

Insider Activity at NMI

In other NMI news, EVP Aurora Swithenbank sold 11,662 shares of the stock in a transaction on Tuesday, August 11th. The stock was sold at an average price of $44.51, for a total transaction of $519,075.62. Following the sale, the executive vice president owned 50,734 shares of the company's stock, valued at approximately $2,258,170.34. This trade represents a 18.69% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, CEO Adam Pollitzer sold 172,706 shares of NMI stock in a transaction on Friday, September 4th. The shares were sold at an average price of $44.85, for a total value of $7,745,864.10. Following the completion of the transaction, the chief executive officer owned 270,267 shares in the company, valued at $12,121,474.95. This represents a 38.99% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Company insiders own 2.44% of the company's stock.

About NMI

NMI Holdings, Inc NASDAQ: NMIH is the parent company of National MI, a U.S.-based provider of private mortgage insurance. Through its insurance subsidiaries, the company helps lenders manage the risk associated with residential mortgage loans, particularly loans made to borrowers with down payments below traditional thresholds.

National MI primarily offers private mortgage insurance for residential purchase and refinance transactions. Its products are designed for mortgage lenders, banks, credit unions and other housing-finance institutions, helping them expand access to homeownership while transferring a portion of potential credit risk.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.