Essent Group (ESNT)
NYSE:ESNT
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Essent Group
(NYSE:ESNT)
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Rating:76Outperform
Price Target:
$69.00
▲(12.14% Upside)
Action:ReiteratedDate:02/19/26
The score is driven primarily by strong financial performance (high profitability, conservative balance sheet, and strong cash conversion) and supportive valuation (low P/E plus dividend). The earnings call reinforces capital strength and shareholder returns, while the main drag is weaker technical momentum and some credit/expense headwinds highlighted in guidance.
Positive Factors
High-quality cash generation
Free cash flow tracks net income (~0.99) and operating cash flow was $856M in 2025, indicating durable cash conversion. This underpins consistent dividend increases, buybacks and funds underwriting losses, supporting long-term shareholder returns and financial flexibility across cycles.
Negative Factors
Rising loss provisions
Quarterly and annual increases in loss provisions reflect portfolio seasoning and rising defaults. If defaults continue to drift higher, underwriting margins and return on equity could face sustained pressure, forcing higher reserves and constraining capital available for growth or distributions.
Read all positive and negative factors
Positive Factors
Negative Factors
High-quality cash generation
Free cash flow tracks net income (~0.99) and operating cash flow was $856M in 2025, indicating durable cash conversion. This underpins consistent dividend increases, buybacks and funds underwriting losses, supporting long-term shareholder returns and financial flexibility across cycles.
Read all positive factors
Essent Group (ESNT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.82B
Dividend Yield1.88%
Average Volume (3M)636.98K
Price to Earnings (P/E)9.3
Beta (1Y)0.58
Revenue Growth2.78%
EPS Growth-0.50%
CountryUS
Employees555
SectorFinancial
Sector Strength70
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)1.60
Shares Outstanding94,542,850
10 Day Avg. Volume547,682
30 Day Avg. Volume636,983
Financial Highlights & Ratios
PEG Ratio12.91
Price to Book (P/B)1.12
Price to Sales (P/S)5.10
P/FCF Ratio7.58
Enterprise Value/Market Cap1.06
Enterprise Value/Revenue4.81
Enterprise Value/Gross Profit5.44
Enterprise Value/Ebitda7.16
Forecast
1Y Price Target
$67.33Price Target Upside9.43% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)7.13
Revenue Forecast (FY)$1.23B
Essent Group Business Overview & Revenue Model
Company Description
Essent Group Ltd., through its subsidiaries, provides private mortgage insurance and reinsurance for mortgages secured by residential properties located in the United States. Its mortgage insurance products include primary, pool, and master policy...
How the Company Makes Money
Essent Group generates revenue primarily through the sale of private mortgage insurance premiums. When borrowers take out loans with less than a 20% down payment, lenders typically require PMI to protect against potential defaults. Essent collects...
Essent Group Earnings Call Summary
Earnings Call Date:Feb 13, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 01, 2026
Earnings Call Sentiment Positive
The call presented a net positive picture: strong earnings, cash flow, book value growth, robust liquidity and disciplined capital returns (dividends + significant share buybacks). Offsetting negatives were modest increases in loss provisions and defaults, slightly higher operating expenses, flat persistency and a cautious outlook for near-term insurance-in-force growth. Management emphasized measured growth, reinsurance strength, and the ability to return capital, suggesting confidence in the franchise despite some credit-seasoning headwinds.Positive Updates
Strong Quarterly and Full-Year Earnings
Q4 net income of $155 million ($1.60 diluted EPS) and full-year 2025 net income of $690 million ($6.90 diluted EPS) with a return on average equity of 12%.
Negative Updates
Rising Loss Provisions and Seasoning-Related Defaults
Mortgage Insurance provision for losses and loss adjustment expenses increased to $55.2 million in Q4 (up from $44.2 million prior quarter and $37.2 million year-ago quarter); full-year net provision on MI was approximately $145 million reflecting higher defaults from portfolio seasoning.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Quarterly and Full-Year Earnings
Q4 net income of $155 million ($1.60 diluted EPS) and full-year 2025 net income of $690 million ($6.90 diluted EPS) with a return on average equity of 12%.
Read all positive updates
Company Guidance
Management guided that for 2026 the Mortgage Insurance average base premium rate should be ~40 basis points (vs. ~41 bps recently), Mortgage Insurance operating expenses are expected to be about $145 million (vs. $140M in 2025), and the consolidated effective tax rate is estimated at ~17% (2025: 16%); they expect earned premium and insurance‑in‑force growth to be modest, Essent Re anticipates $100–$150 million of written P&C premium with roughly two‑thirds earned in 2026 at a combined ratio consistent with a diversified P&C reinsurer, Essent Guaranty can pay ordinary dividends of ~$246 million in 2026, the board raised the quarterly dividend 13% to $0.35/share starting in 2026, and management noted Q4 new‑money yields near 5% as well as holding‑company liquidity headroom (a $500M undrawn revolver and access to $1.3B of excess‑of‑loss reinsurance).Essent Group Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
88
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.26B | 1.27B | 1.13B | 1.02B | 1.03B |
| Gross Profit | 1.11B | 1.19B | 1.10B | 1.19B | 997.45M |
| EBITDA | 859.79M | 896.59M | 857.66M | 1.01B | 833.98M |
| Net Income | 689.97M | 729.40M | 696.39M | 831.35M | 681.78M |
Balance Sheet | |||||
| Total Assets | 7.44B | 7.11B | 6.43B | 5.72B | 5.72B |
| Cash, Cash Equivalents and Short-Term Investments | 123.05M | 6.01B | 141.79M | 333.27M | 5.04B |
| Total Debt | 562.61M | 493.96M | 421.92M | 420.86M | 419.82M |
| Total Liabilities | 1.68B | 1.51B | 1.32B | 1.26B | 1.49B |
| Stockholders Equity | 5.76B | 5.60B | 5.10B | 4.46B | 4.24B |
Cash Flow | |||||
| Free Cash Flow | 848.69M | 854.77M | 759.00M | 584.84M | 706.76M |
| Operating Cash Flow | 856.05M | 861.53M | 763.00M | 588.82M | 709.26M |
| Investing Cash Flow | -154.74M | -706.93M | -525.57M | -398.87M | -583.17M |
| Financing Cash Flow | -709.75M | -164.91M | -176.88M | -190.20M | -147.43M |
Essent Group Technical Analysis
Positive
61.53
Price Trends
60.22
Positive
61.45
Positive
60.67
Positive
Market Momentum
0.21
Negative
65.04
Neutral
92.75
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESNT, the sentiment is Positive. The current price of 61.53 is above the 20-day moving average (MA) of 58.52, above the 50-day MA of 60.22, and above the 200-day MA of 60.67, indicating a bullish trend. The MACD of 0.21 indicates Negative momentum. The RSI at 65.04 is Neutral, neither overbought nor oversold. The STOCH value of 92.75 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ESNT.
Essent Group Risk Analysis
Essent Group disclosed 51 risk factors in its most recent earnings report. Essent Group 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
Essent Group Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $2.99B | 8.30 | 15.80% | ― | 8.86% | 9.51% | |
82 Outperform | $6.03B | 8.72 | 12.83% | 2.02% | 2.40% | 1.18% | |
76 Outperform | $5.82B | 9.33 | 12.35% | 1.88% | 2.78% | -0.50% | |
70 Outperform | $4.71B | 8.52 | 12.59% | 2.78% | -3.68% | 3.65% | |
68 Neutral | $5.97B | 8.93 | 14.33% | 1.89% | 2.20% | 9.90% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | $6.55B | 10.21 | 11.87% | 3.58% | 25.99% | 426.44% |
* Financial Sector Average
ESNT
Essent Group
61.53
7.76
14.43%
FAF
First American Financial
63.99
6.56
11.42%
MTG
MGIC Investment
27.76
4.33
18.49%
RDN
Radian Group
34.58
3.13
9.94%
NMIH
NMI Holdings
39.33
5.39
15.88%
ACT
Enact Holdings
42.72
8.12
23.45%
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.