NMI Holdings (NMIH) AI Stock Analysis

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NMI Holdings

(NASDAQ:NMIH)

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Outperform 79 (OpenAI - 5.2)

Rating:79Outperform

Price Target:

$46.00

▲(15.17% Upside)

NMI Holdings' strong financial performance and attractive valuation are the primary drivers of its score. The company's robust profitability and efficient cost management, highlighted in the earnings call, further support its positive outlook. Technical indicators suggest moderate bullish momentum, though caution is advised due to potential overbought conditions.

Positive Factors

Revenue Growth

Record revenue growth indicates strong market demand and effective business strategies, supporting long-term financial stability.

Operational Efficiency

Efficient cost management and low expense ratios enhance profitability and provide a competitive edge in the insurance industry.

Insurance Portfolio Growth

Growth in insurance-in-force reflects strong market position and increased customer trust, contributing to sustained revenue streams.

Negative Factors

Increased Claims Expense

Rising claims expenses could pressure margins and profitability, potentially impacting financial performance if trends continue.

Potential Macro Risks

Macro risks like labor market strain can affect mortgage markets, potentially reducing demand for mortgage insurance products.

Geographic Market Pressures

Declining house price appreciation in key markets could reduce new mortgage originations, impacting future revenue growth.

NMI Holdings (NMIH) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$3.09B

Dividend YieldN/A

Average Volume (3M)461.28K

Price to Earnings (P/E)8.1

Beta (1Y)0.61

Revenue Growth8.86%

EPS Growth9.51%

CountryUS

Employees230

SectorFinancial

Sector Strength70

IndustryInsurance - Specialty

Share Statistics

EPS (TTM)1.20

Shares Outstanding76,867,930

10 Day Avg. Volume594,897

30 Day Avg. Volume461,277

Financial Highlights & Ratios

PEG Ratio0.73

Price to Book (P/B)1.22

Price to Sales (P/S)4.49

P/FCF Ratio7.55

Enterprise Value/Market Cap-13.20

Enterprise Value/Revenue-58.93

Enterprise Value/Gross Profit-63.94

Enterprise Value/Ebitda-77.03

Forecast

1Y Price Target

$46.25

Price Target Upside15.80% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering4

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

NMI Holdings Business Overview & Revenue Model

Company DescriptionNMI Holdings, Inc. provides private mortgage guaranty insurance services in the United States. The company offers mortgage insurance services; and outsourced loan review services to mortgage loan originators. It serves national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, internet-sourced lenders, and other non-bank lenders. NMI Holdings, Inc. was incorporated in 2011 and is headquartered in Emeryville, California.

How the Company Makes MoneyNMI Holdings generates revenue primarily through the premiums collected from its private mortgage insurance policies. The company charges lenders a premium to insure a portion of the mortgage amount, which provides coverage against borrower defaults. Additionally, NMIH earns income from investment income on the premiums it receives before claims are paid out. The company also benefits from economies of scale as it grows its insurance portfolio, allowing it to spread risk across a larger base. Significant partnerships with mortgage lenders, as well as a focus on expanding its market share in the PMI industry, contribute positively to its earnings. Furthermore, NMI Holdings' commitment to advanced technology and data analytics enhances its underwriting processes and risk assessment, improving profitability.

NMI Holdings Key Performance Indicators (KPIs)

Any

Primary Insurance In-Force

Primary Insurance In-Force
Total outstanding mortgage insurance coverage the company currently guarantees. Size and trends in in-force reflect the scale of future premium income and the company’s exposure to borrower defaults—growing in-force suggests expansion, while declines signal shrinking business or tighter underwriting.

Chart InsightsNMI has steadily expanded its primary insurance-in-force to record scale, and that growing, well‑retained portfolio is driving revenue, investment income and the operational leverage behind aggressive buybacks. The business is benefiting from seasoning of prior vintages, but rising claims and localized housing weakness in Sunbelt markets represent the main risks that could pressure loss costs or slow new insurance written; monitor defaults and persistency to see if underwriting economics remain intact as scale increases.

Data provided by:

The Fly

NMI Holdings Earnings Call Summary

Earnings Call Date:Feb 10, 2026

(Q4-2025)

% Change Since: |

Next Earnings Date:May 05, 2026

Earnings Call Sentiment Positive

The call emphasized multiple record achievements — revenue, insured in force, policies outstanding, full-year net income and EPS growth, improved book value, strong reinsurance deals, and disciplined capital returns — while acknowledging manageable portfolio seasoning effects: a modest decline in persistency, a sequential rise in defaults and claims tied to growth and seasonality, and macro/consumer risks to monitor. Management presented these headwinds as expected or contained within its risk framework and reinforced strong capital and reinsurance positions that mitigate downside risk.

Q4-2025 Updates

Positive Updates

Record Revenue and Strong Full-Year Financial Performance

Total revenue reached a record $180.7M in Q4 and $706.4M for full-year 2025, up ~9% year-over-year. GAAP net income for 2025 was a record $388.9M, up 8% versus 2024, with full-year diluted EPS of $4.92, up 11% year-over-year, and a full-year return on equity of 16.2%.

Robust New Insurance Written (NIW) and Portfolio Growth

Generated $14.2B of NIW in Q4 and $49B for full-year 2025. Primary insurance in force ended the year at a record $221.4B, up 1.4% sequentially and 5.4% year-over-year, with over 680,000 policies outstanding.

Improved Book Value and Capital Position

Book value per share was $33.98 and book value per share excluding unrealized investment gains/losses was $34.58, up 4% sequentially and 16% year-over-year. At year-end, available PMIERs assets were $3.5B vs $2.1B of risk-based required assets, leaving $1.4B of excess available assets.

Successful Capital & Reinsurance Execution

Secured a series of quota share and excess-of-loss reinsurance treaties including forward-flow coverage through 2028 at an estimated 4% pretax cost of capital; management described these as among the best in cost, capacity, duration, and structure.

Record Premiums Earned and Yield Stability

Net premiums earned were a record $152.5M in Q4 (up ~6.3% YoY). Net yield held at 28 bps and core yield (ex-reinsurance & cancellation contributions) remained steady at 34 bps quarter-over-quarter.

Share Repurchase Execution

Repurchased $31M of common stock in Q4 (811,000 shares at an average $37.72). Since 2022, repurchases total $349M (12.1M shares) with $226M of repurchase capacity remaining; management expects a pacing assumption of roughly $25M per quarter but will opportunistically accelerate.

Expense Discipline and Operating Efficiency

Underwriting and operating expenses were $31.1M in Q4 (same absolute dollars as 2024), producing an expense ratio of 20.4%, inside the company's 20–25% target range and described as best-in-class versus peers.

Investment Income Growth

Investment income increased to $27.5M in Q4, up from $22.7M in 2024 (~21% increase), providing an additional driver of revenue growth.

Customer & Distribution Momentum

Activated 90 new lenders in 2025 and ended the year with over 1,700 active accounts, reflecting ongoing customer development and market traction.

Negative Updates

Persistency Decline

Twelve-month persistency declined to 83.4% in Q4 from 83.9% in Q3, a 50 basis point sequential decrease driven by rate movement and increased refinance/purchase activity; management expects persistency to trend back toward historical norms over time.

Increase in Defaults and Default Rate

Defaults rose to 7,661 at December 31 from 7,093 at September 30, an increase of ~8.0% quarter-over-quarter. The reported default rate at year-end was 1.12%.

Higher Claims Expense Quarter-over-Quarter

Claims expense increased to $21.2M in Q4 from $18.6M in Q3, roughly a 14% sequential rise, reflecting seasonal activity and continued growth/seasoning of the insured portfolio.

Concentration of Runoff and 'Tale of Two Portfolios'

Management highlighted uneven persistency across vintages: 2023–2024 cohorts are experiencing sharper runoff vs. earlier vintages. This could accelerate turnover in some higher-quality vintages and affect the timing of credit normalization as large post-COVID vintages age.

Macro & Consumer Headwinds

Management flagged macro risks including high consumer debt levels, slowing hiring, reduced consumer confidence in some cohorts, and the potential for rate-driven volatility—risks that could put pressure on credit over time if stress emerges.

Quarterly Volatility in Premium Yields and Reinsurance Dependency

Net yield is influenced by reinsurance costs and cancellation earnings; while core yield was stable, net yield and profit commissions can fluctuate with loss experience and reinsurance pricing, and the company continues to rely on reinsurance to scale growth (forward-flow at ~4% pretax cost).

Company Guidance

Management's guidance emphasized stability and continued disciplined growth: they expect core yield to remain generally stable (Q4 core yield 34 bps; net yield 28 bps), persistency to stay well above historical norms despite Q4 12‑month persistency of 83.4% (down 50 bps Q/Q) and to trend toward historical levels over time, and they expect the private MI market to remain strong in 2026 (industry NIW ~ $310B in 2025) if rates hold. They secured quota‑share and excess‑of‑loss reinsurance providing forward‑flow coverage through 2028 at an estimated 4% pre‑tax cost of capital, plan to continue disciplined capital returns (roughly $25M/quarter buyback pace — Q4 repurchases $31M; $226M remaining capacity; $349M repurchased to date), and aim to sustain mid‑teens returns (2025 ROE 16.2%) while growing book value (book value per share $33.98; ex‑unrealized $34.58, +4% Q/Q, +16% YoY). Key balance‑sheet/operating reference points cited were $221.4B primary insurance in force (up 1.4% Q/Q, 5.4% YoY), $49B NIW in 2025 ($14.2B in Q4), year‑end available PMIERs assets $3.5B vs. required $2.1B (excess $1.4B), and Q4 financials of total revenue $180.7M, net premiums earned $152.5M, investment income $27.5M, underwriting & operating expenses $31.1M (expense ratio 20.4%), claims $21.2M, and GAAP net income $94.2M (Q4 EPS $1.20; FY GAAP net income $388.9M, EPS $4.92).

NMI Holdings Financial Statement Overview

Summary

NMI Holdings demonstrates strong profitability with high net profit and EBIT margins. The balance sheet is solid with low debt-to-equity, and cash flow is efficient despite recent growth challenges. Overall, the company maintains excellent financial health, though revenue and cash flow growth have slowed.

Income Statement

Very Positive

NMI Holdings demonstrates strong profitability with a high net profit margin of 55.02% TTM, supported by a robust EBIT margin of 74.79% and EBITDA margin of 75.22%. The revenue growth rate of 1.85% TTM indicates steady growth, although it has slowed compared to previous years. Overall, the company maintains excellent profitability and growth metrics.

Balance Sheet

Positive

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.166 TTM, indicating prudent leverage. The return on equity is strong at 16.08% TTM, showcasing effective use of equity capital. The equity ratio is healthy, suggesting a stable asset base. However, the slight decrease in return on equity over time may warrant attention.

Cash Flow

Positive

Cash flow analysis reveals a slight decline in free cash flow growth at -0.68% TTM, which could be a concern if it continues. However, the operating cash flow to net income ratio of 1.22 TTM and free cash flow to net income ratio of 0.996 indicate efficient cash generation relative to earnings. The company maintains a strong cash flow position, despite recent growth challenges.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	692.21M	705.58M	650.97M	579.00M	524.46M	485.64M
Gross Profit	637.91M	647.93M	618.70M	555.61M	526.96M	470.82M
EBITDA	529.50M	528.28M	512.24M	456.46M	421.34M	339.75M
Net Income	380.88M	388.93M	360.11M	322.11M	292.90M	231.13M
Balance Sheet
Total Assets	3.73B	3.84T	3.35B	2.94B	2.52B	2.45B
Cash, Cash Equivalents and Short-Term Investments	505.83M	43.94B	54.22M	95.35M	42.25M	73.48M
Total Debt	416.55M	417.03M	415.15M	397.60M	396.05M	394.62M
Total Liabilities	1.21B	1.25T	1.13B	1.01B	902.30M	884.79M
Stockholders Equity	2.51B	2.59B	2.22B	1.93B	1.61B	1.57B
Cash Flow
Free Cash Flow	386.85M	419.30M	386.70M	333.31M	302.82M	313.48M
Operating Cash Flow	393.38M	419.30M	393.60M	342.68M	313.39M	325.72M
Investing Cash Flow	-284.94M	-316.47M	-339.29M	-200.00M	-289.79M	-374.18M
Financing Cash Flow	-111.32M	-113.20M	-96.70M	-90.42M	-55.83M	-1.83M

NMI Holdings Technical Analysis

Technical Analysis Sentiment

Positive

Last Price39.94

Price Trends

50DMA

39.48

Positive

100DMA

38.29

Positive

200DMA

38.68

Positive

Market Momentum

MACD

0.38

Negative

RSI

59.10

Neutral

STOCH

62.04

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NMIH, the sentiment is Positive. The current price of 39.94 is above the 20-day moving average (MA) of 38.94, above the 50-day MA of 39.48, and above the 200-day MA of 38.68, indicating a bullish trend. The MACD of 0.38 indicates Negative momentum. The RSI at 59.10 is Neutral, neither overbought nor oversold. The STOCH value of 62.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NMIH.

NMI Holdings Risk Analysis

NMI Holdings disclosed 44 risk factors in its most recent earnings report. NMI 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

NMI Holdings Peers Comparison

Overall Rating

UnderperformOutperform

Sector (68)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACT	82 Outperform	$6.14B	9.39	12.75%	2.02%	2.40%	1.18%
ESNT	81 Outperform	$6.21B	9.31	12.35%	1.88%	2.78%	-0.50%
NMIH	79 Outperform	$3.09B	8.13	16.17%	―	8.86%	9.51%
AGO	70 Outperform	$3.99B	10.50	7.06%	1.50%	7.56%	-38.23%
MTG	68 Neutral	$6.01B	8.48	―	1.89%	2.20%	9.90%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
RDN	63 Neutral	$4.48B	8.18	12.56%	2.78%	-3.68%	3.65%

* Financial Sector Average

Performance Comparison

NMIH

NMI Holdings

40.92

5.39

15.17%

AGO

Assured Guaranty

86.67

-4.09

-4.51%

MTG

MGIC Investment

27.36

3.34

13.91%

RDN

Radian Group

34.24

2.85

9.08%

ESNT

Essent Group

65.51

8.80

15.52%

ACT

Enact Holdings

43.54

10.78

32.91%

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: Nov 17, 2025