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NMI Holdings (NMIH) Up 8.9% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for NMI Holdings (NMIH). Shares have added about 8.9% in that time frame, outperforming 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 catalysts.

NMI Holdings Q1 Earnings Top on Higher Premiums Earned

NMI Holdings reported first-quarter 2023 operating net income per share of 88 cents, beating the Zacks Consensus Estimate by 2.3% and our estimate of operating net income of 85 cents. The bottom line increased 14.3% year over year.

NMI Holdings’ total operating revenues of $136.8 million increased 7.3% year over year on higher net premiums earned (up 4.5%) and net investment income (up 46%). The top line beat the Zacks Consensus Estimate by 0.8% and our estimate of $135.2 million.

The quarterly results reflected increased strength in operating performance and increasing persistency, which drove growth in the company’s high-quality insured portfolio. Improving net premiums earned and expense discipline led to record profitability and strong returns on equity.

Operational Update

Primary insurance in force increased 18% to $186.7 billion. Annual persistency was 85.1%, up 1360 basis points (bps) year over year.

New insurance written was $8.7 billion, down 38.3% year over year, reflecting a decline in refinancing origination volume year over year.

Underwriting and operating expenses totaled $25.8 million, down 22% year over year. Insurance claims and claim expenses were $6.7 million against a benefit of $0.6 million in the year-ago quarter.

The loss ratio was 5.5 versus (0.5) in the year-ago quarter, reflecting higher insurance claims and expenses.

The adjusted expense ratioof 21.2 improved 680 bps year over year due to lower underwriting and operating expenses than the year-ago quarter. The adjusted combined ratio of 26.7 improved 80 bps year over year.

Financial Update

Book value per share, a measure of net worth, was up about 14.9% year over year to $20.49 as of Mar 31, 2023.

NMI Holdings had $83.1 million in cash and cash equivalents, down from $44.4 million at 2022-end. The debt balance of $396.4 million increased from $396.1 million at 2022-end.

Annualized return on equity for the quarter was 17.9%, up 40 bps.

Total PMIERs available assets were $2.5 billion and net risk-based required assets totaled $1.2 billion at the first-quarter end.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

VGM Scores

Currently, NMI Holdings has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

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


Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, NMI Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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