NMI (NASDAQ:NMIH) Posts Quarterly Earnings Results, Beats Expectations By $0.10 EPS

Key Points

• NMI beat quarterly expectations: The mortgage insurer reported adjusted diluted EPS of $1.38, $0.10 above estimates, while revenue rose 8.1% year over year to $187.9 million.
• Operating performance remained strong: New insurance written reached $16 billion, raising insurance in force to a record $227.1 billion. Defaults declined slightly to 8,020, and NMI repurchased $31.4 million of stock during the quarter.
• Management sees some risks ahead: Defaults are expected to rise in the second half as seasonal benefits fade, with housing pressure in several regions and increased competition in large transaction-focused business. Analysts maintain a “Moderate Buy” consensus with an average $46 price target.

NMI (NASDAQ:NMIH - Get Free Report) announced its earnings results on Thursday. The financial services provider reported $1.38 EPS for the quarter, beating analysts' consensus estimates of $1.28 by $0.10, FiscalAI reports. NMI had a net margin of 53.82% and a return on equity of 15.18%. The firm had revenue of $187.89 million for the quarter, compared to analysts' expectations of $156.26 million. During the same quarter in the previous year, the business posted $1.22 EPS. The company's quarterly revenue was up 8.1% on a year-over-year basis.

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

• Record second-quarter results included $187.9 million of revenue, $106 million of adjusted net income, and adjusted diluted EPS of $1.38, with net income up 7% sequentially and 10% year over year.
• New insurance written totaled $16 billion, lifting primary insurance in force to a record $227.1 billion; management also highlighted continued market-share momentum and a 49% increase in its insured portfolio over four years.
• Credit performance remained strong, with defaults declining slightly to 8,020 and a 1.16% default rate, while favorable prior-year reserve development continued. Management cited resilient employment, home-price appreciation, and borrower home equity as supports for credit quality.
• National MI repurchased $31.4 million of stock during the quarter and has $167 million remaining under its authorization; excess available assets under PMIERs totaled $1.6 billion, supporting future capital flexibility.
• Management expects defaults to trend higher in the second half as seasonal tailwinds fade and noted regional housing pressure in Florida, Texas, parts of the Sun Belt, Mountain West, and West Coast. It also flagged greater competitive pressure in large, transactionally oriented business.

NMI Price Performance

Shares of NMIH traded down $0.90 during mid-day trading on Thursday, hitting $43.44. 448,645 shares of the stock were exchanged, compared to its average volume of 425,140. The company has a market cap of $3.30 billion, a PE ratio of 8.85, a price-to-earnings-growth ratio of 1.54 and a beta of 0.54. The firm has a 50-day moving average of $39.48 and a two-hundred day moving average of $38.95. The company has a debt-to-equity ratio of 0.16, a quick ratio of 0.63 and a current ratio of 0.63. NMI has a 52-week low of $34.84 and a 52-week high of $44.74.

Analysts Set New Price Targets

Several analysts recently weighed in on the company. JPMorgan Chase & Co. upped their price target on NMI from $43.00 to $48.00 and gave the stock an "overweight" rating in a research note on Monday, July 13th. UBS Group set a $46.00 price target on shares of NMI in a research note on Friday, May 22nd. Royal Bank Of Canada initiated coverage on NMI in a research report on Friday, May 22nd. They set an "outperform" rating and a $46.00 price objective for the company. Keefe, Bruyette & Woods increased their price target on shares of NMI from $46.00 to $47.00 and gave the stock an "outperform" rating in a research report on Thursday, June 25th. Finally, Weiss Ratings raised NMI from a "buy (b-)" rating to a "buy (b)" rating in a research note on Friday, June 12th. Four equities research analysts have rated the stock with a Buy rating and one has given a Hold rating to the stock. According to MarketBeat, NMI has a consensus rating of "Moderate Buy" and a consensus price target of $46.00.

Insider Activity at NMI

In related news, Director Michael Curry Montgomery sold 1,554 shares of the stock in a transaction dated Tuesday, May 19th. The shares were sold at an average price of $37.90, for a total value of $58,896.60. Following the completion of the transaction, the director owned 69,026 shares of the company's stock, valued at approximately $2,616,085.40. This trade represents a 2.20% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Insiders own 2.44% of the company's stock.

Institutional Investors Weigh In On NMI

Institutional investors have recently made changes to their positions in the company. Dimensional Fund Advisors LP lifted its stake in shares of NMI by 0.7% during the 4th quarter. Dimensional Fund Advisors LP now owns 4,317,436 shares of the financial services provider's stock worth $176,111,000 after acquiring an additional 28,569 shares during the last quarter. Bank of America Corp DE boosted its position in NMI by 95.3% during the 3rd quarter. Bank of America Corp DE now owns 1,014,557 shares of the financial services provider's stock valued at $38,898,000 after acquiring an additional 495,144 shares in the last quarter. Qube Research & Technologies Ltd boosted its position in NMI by 10.8% during the second quarter. Qube Research & Technologies Ltd now owns 758,481 shares of the financial services provider's stock valued at $32,000,000 after purchasing an additional 73,695 shares in the last quarter. AQR Capital Management LLC boosted its holdings in shares of NMI by 30.4% in the 4th quarter. AQR Capital Management LLC now owns 733,478 shares of the financial services provider's stock valued at $29,919,000 after buying an additional 171,203 shares in the last quarter. Finally, JPMorgan Chase & Co. boosted its stake in NMI by 2.2% in the fourth quarter. JPMorgan Chase & Co. now owns 638,679 shares of the financial services provider's stock valued at $26,052,000 after acquiring an additional 14,008 shares in the last quarter. Institutional investors own 94.12% of the company's stock.

NMI Company Profile

NMI Holdings, Inc NASDAQ: NMIH is a publicly traded mortgage insurance company that provides private mortgage insurance to lenders across the United States and Canada. Through its principal subsidiary, National Mortgage Insurance Corporation, NMI underwrites and issues policies that protect originators and investors against losses arising from borrower default on residential mortgage loans. By mitigating credit risk on higher‐loan‐to‐value mortgages, the company supports homebuyers' access to financing and contributes to overall market liquidity.

Beyond its core mortgage insurance products, NMI offers credit risk‐sharing and reinsurance solutions designed to help clients optimize capital utilization and manage portfolio exposure.

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