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Enact Holdings (ACT)
NASDAQ:ACT
US Market
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Enact Holdings (ACT) AI Stock Analysis

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ACT

Enact Holdings

(NASDAQ:ACT)

Rating:80Outperform
Price Target:
$40.00
▲(15.07%Upside)
Enact Holdings scores well due to its strong financial performance and attractive valuation, despite a slightly bearish technical outlook. The earnings call underlined robust capital returns and credit performance, offset by macroeconomic uncertainties and slight declines in key metrics. The company's strong cash flow and zero debt reliance enhance its stability and growth potential.

Enact Holdings (ACT) vs. SPDR S&P 500 ETF (SPY)

Enact Holdings Business Overview & Revenue Model

Company DescriptionEnact Holdings, Inc. operates as a private mortgage insurance company in the United States. The company is involved in writing and assuming residential mortgage guaranty insurance. It offers private mortgage insurance products primarily insuring prime-based, individually underwritten residential mortgage loans; and contract underwriting services for mortgage lenders. The company was formerly known as Genworth Mortgage Holdings, Inc. and changed its name to Enact Holdings, Inc. in May 2021. Enact Holdings, Inc. was founded in 1981 and is headquartered in Raleigh, North Carolina. Enact Holdings, Inc. is a subsidiary of Genworth Holdings, Inc.
How the Company Makes MoneyEnact Holdings generates revenue primarily through the sale of private mortgage insurance policies to mortgage lenders. These policies are typically required by lenders when borrowers are unable to make a down payment of at least 20% of the home's purchase price. The company earns premiums from these insurance policies, which constitute its primary revenue stream. Additionally, Enact Holdings may engage in reinsurance agreements to manage its risk exposure and optimize capital efficiency. Key factors contributing to its earnings include the volume of new insurance written, persistency of existing policies, and overall economic conditions affecting the housing and mortgage markets. The company also benefits from strategic partnerships with major lenders, which can enhance its distribution channels and market reach.

Enact Holdings Earnings Call Summary

Earnings Call Date:Jul 30, 2025
(Q2-2025)
|
% Change Since: 0.99%|
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Neutral
Enact's earnings call highlighted strong capital returns and robust credit performance, but also noted economic uncertainties and a decline in persistency and new insurance written year-over-year. The recognition as a best place to work reflects a positive internal culture, while macroeconomic challenges pose potential risks.
Q2-2025 Updates
Positive Updates
Increased Capital Returns
Enact announced a meaningful increase in expected capital returns for 2025 to approximately $400 million.
Robust Adjusted Operating Income
The company reported adjusted operating income of $174 million, with an adjusted return on equity over 13%.
Insurance in Force and New Insurance Written
Insurance in force increased 1% year-over-year to $270 billion, and new insurance written was over $13 billion.
Strong Credit Performance
The credit portfolio remains strong with a risk-weighted average FICO score of 746, and a favorable cure rate of 52%.
Recognition as a Best Place to Work
Enact was recognized for the third year as one of the best places to work by Triangle Business Journal.
Negative Updates
Uncertainties in Macroeconomic Environment
Uncertainties such as lack of clarity around trade policy and potential reciprocal tariffs were highlighted as introducing volatility.
Persistency Decline
Persistency was down 2 points sequentially and 1 point year-over-year in the second quarter.
New Insurance Written Decline Year-Over-Year
While there was a 35% sequential increase, new insurance written was down 3% year-over-year.
Expenses Amid Inflation
Operating expenses, excluding restructuring charges, remained flat year-over-year despite the inflationary environment.
Company Guidance
During Enact's second quarter earnings call for fiscal year 2025, the company provided guidance highlighting several key financial metrics. The company reported an adjusted operating income of $174 million and adjusted earnings per diluted share of $1.15, with an adjusted return on equity exceeding 13%. Enact's insurance in force increased by 1% year-over-year to $270 billion, and they generated over $13 billion in new insurance written. The company maintained a robust PMIERs sufficiency ratio of 165%, demonstrating significant financial flexibility. The risk-weighted average FICO score of the portfolio was 746, while the risk-weighted average loan-to-value ratio stood at 93%. Delinquencies decreased by 1% sequentially, and the cure rate was reported at 52%, contributing to a reserve release of $48 million and a loss ratio of 10%. Enact also announced an increase in expected capital returns for 2025 to approximately $400 million, underscoring their strong credit performance and commitment to shareholder value.

Enact Holdings Financial Statement Overview

Summary
Enact Holdings demonstrates strong financial performance with consistent revenue growth, high profit margins, zero reliance on debt, and substantial equity. The company's strong cash flows and financial stability position it well for future opportunities, despite the absence of EBITDA reporting.
Income Statement
88
Very Positive
Enact Holdings shows strong profitability with a consistent increase in Total Revenue from $1,156,686,000 in 2023 to $1,201,774,000 in 2024, representing a revenue growth of approximately 4.2%. The company maintains a high Gross Profit Margin of 100% due to zero cost of goods sold. Additionally, a Net Profit Margin of 57.2% in 2024 indicates robust profitability, supported by a consistent rise in EBIT Margin from 78.3% in 2023 to 82.2% in 2024. However, the absence of reported EBITDA figures could limit the comprehensive analysis of operational efficiency.
Balance Sheet
92
Very Positive
The balance sheet reflects a solid financial position with a Debt-to-Equity Ratio of 0 in 2024, demonstrating no reliance on debt financing. A Return on Equity (ROE) of 13.8% in 2024 underscores effective management in generating profits from shareholders’ equity. Additionally, an Equity Ratio of 76.6% suggests a strong equity base relative to total assets, which enhances financial stability and reduces financial risk.
Cash Flow
85
Very Positive
The cash flow statement indicates healthy cash generation with an Operating Cash Flow to Net Income Ratio of 1.0 in 2024, showing efficient conversion of net income into cash. A Free Cash Flow of $686,262,000 in 2024 demonstrates strong cash availability for reinvestment or shareholder returns. However, the Free Cash Flow Growth Rate is limited due to a high base effect from the prior year, indicating moderate growth potential in cash flow.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.22B1.20B1.15B1.10B1.12B1.11B
Gross Profit948.01M943.06M903.38M949.75M748.55M1.11B
EBITDA1.13B929.22M903.38M949.92M746.23M490.66M
Net Income692.86M688.07M665.51M704.16M546.68M370.42M
Balance Sheet
Total Assets6.72B6.52B6.19B5.71B5.87B5.65B
Cash, Cash Equivalents and Short-Term Investments6.45B2.13B5.90B5.40B5.69B5.50B
Total Debt743.40M743.05M745.42M742.83M740.42M738.16M
Total Liabilities1.60B1.53B1.56B1.61B1.76B1.77B
Stockholders Equity5.12B5.00B4.63B4.10B4.11B3.88B
Cash Flow
Free Cash Flow725.69M686.26M632.04M567.13M-113.53M704.35M
Operating Cash Flow725.69M686.26M632.04M560.51M572.12M704.35M
Investing Cash Flow-296.62M-320.51M-229.40M-220.25M-398.78M-1.14B
Financing Cash Flow-408.13M-382.00M-300.73M-252.31M-200.29M300.30M

Enact Holdings Technical Analysis

Technical Analysis Sentiment
Negative
Last Price34.76
Price Trends
50DMA
35.66
Negative
100DMA
35.18
Negative
200DMA
34.33
Positive
Market Momentum
MACD
-0.32
Positive
RSI
43.23
Neutral
STOCH
38.83
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACT, the sentiment is Negative. The current price of 34.76 is below the 20-day moving average (MA) of 35.44, below the 50-day MA of 35.66, and above the 200-day MA of 34.33, indicating a neutral trend. The MACD of -0.32 indicates Positive momentum. The RSI at 43.23 is Neutral, neither overbought nor oversold. The STOCH value of 38.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ACT.

Enact Holdings Risk Analysis

Enact Holdings disclosed 38 risk factors in its most recent earnings report. Enact Holdings 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

Enact Holdings Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$5.29B7.9313.47%2.20%3.06%5.70%
78
Outperform
$4.56B8.6313.07%3.07%2.95%4.08%
75
Outperform
$6.10B8.5415.12%2.01%4.64%15.36%
74
Outperform
$2.97B7.9316.91%9.99%11.47%
73
Outperform
$5.68B8.2013.29%2.11%9.87%3.41%
67
Neutral
$17.78B11.609.11%3.88%10.92%-3.96%
66
Neutral
$4.13B9.877.90%1.54%-4.43%-45.42%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ACT
Enact Holdings
34.76
2.00
6.11%
AGO
Assured Guaranty
84.58
4.80
6.02%
MTG
MGIC Investment
25.90
1.90
7.92%
RDN
Radian Group
32.61
-1.96
-5.67%
ESNT
Essent Group
55.99
-4.03
-6.71%
NMIH
NMI Holdings
37.32
-0.90
-2.35%

Enact Holdings Corporate Events

Executive/Board ChangesShareholder Meetings
Enact Holdings Stockholders Approve Key Proposals
Neutral
May 19, 2025

On May 14, 2025, Enact Holdings held its Annual Meeting of Stockholders where several key proposals were voted on. The election of directors to serve until the 2026 Annual Meeting saw all nominees receiving a majority of votes in favor, with Dominic J. Addesso and Michael A. Bless among those elected. Additionally, the advisory vote to approve Named Executive Officer compensation was passed with a significant majority, and the appointment of KPMG LLP as the independent registered public accounting firm for the 2025 fiscal year was ratified.

The most recent analyst rating on (ACT) stock is a Hold with a $36.00 price target. To see the full list of analyst forecasts on Enact Holdings stock, see the ACT Stock Forecast page.

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.Date of analysis: Aug 01, 2025