A month has gone by since the last earnings report for NMI Holdings (NMIH Quick QuoteNMIH - Free Report) . Shares have added about 0.4% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is NMI Holdings due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

NMI Holdings Q4 Earnings Beat on Higher Premiums

NMI Holdings reported fourth-quarter 2023 operating net income per share of $1.01, which beat the Zacks Consensus Estimate by 6.3%. The bottom line increased 17.4% year over year. The quarterly results reflected higher premiums and net investment income, and increased persistency, which drove growth in the company’s high-quality insured portfolio.

Operational Update

NMI Holdings’ total operating revenues of $151.4 million increased 13.7% year over year on higher net premiums earned (up 11.1%) and net investment income (up 36.8%). Revenues beat the Zacks Consensus Estimate by 0.9%.
Primary insurance in force increased 7.1% to $197 billion. Annual persistency was 86.1%, up 260 basis points (bps) year over year. New insurance written was $8.9 billion, down 16.7% year over year.

Underwriting and operating expenses totaled $29.7 million, up 11.3% year over year. Insurance claims and claim expenses were $8.2 million, up 1.4% year over year. The loss ratio was 6.2, which improved 330 bps year over year.

The adjusted expense ratio of 22.4 improved 10 bps year over year, while the adjusted combined ratio of 28.5 improved 330 bps year over year.

Full-Year Highlights

Operating net income per share of $3.84 increased 13.3% year over year. Operating revenues improved 10.7% year over year. Adjusted expense ratio improved 300 bps, while adjusted combined ratio deteriorated 220 bps.

Financial Update

Book value per share, a measure of net worth, was up 23.3% year over year to $23.81 as of Dec 31, 2023. NMI Holdings had $96.7 million in cash and cash equivalents, more than doubled from 2022-end. The debt balance of $397.6 million increased 0.4% from the end of 2022. Annualized adjusted return on equity was 18%, which contracted 40 bps year over year. Total PMIERs available assets were $2.7 billion and net risk-based required assets totaled $1.5 billion at the fourth quarter of 2023-end.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

At this time, NMI Holdings has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

NMI Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

NMI Holdings is part of the Zacks Insurance - Property and Casualty industry. Over the past month, American Financial Group (AFG Quick QuoteAFG - Free Report) , a stock from the same industry, has gained 6.5%. The company reported its results for the quarter ended December 2023 more than a month ago.

American Financial reported revenues of $1.94 billion in the last reported quarter, representing a year-over-year change of +1.5%. EPS of $2.84 for the same period compares with $2.99 a year ago.

American Financial is expected to post earnings of $2.78 per share for the current quarter, representing a year-over-year change of -3.8%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.8%.

American Financial has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.