NMI Holdings Trades Above 50-Day SMA: How to Play the Stock Now?

NMI Holdings, Inc. NMIH has been trading above its 50-day simple moving average (SMA), signaling a short-term bullish trend.

The 50-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important as this is the first marker of an uptrend or downtrend.

Price Performance of NMIH

Shares of NMI Holdings have lost 1.6% year to date, underperforming its industry, the Finance sector, and the Zacks S&P 500 Composite’s growth of 5.8%, 17.3% and 16.8%, respectively, in the same time frame.

The insurer has a market capitalization of $3.1 billion. The average volume of shares traded in the last three months was 0.5 million.

NMIH Shares Are Affordable

Shares of NMI Holdings are trading at a discount compared with the industry. Its forward price-to-book value of 1.27X is lower than the industry average of 1.55X.

However, shares of Arch Capital Group Ltd. ACGL and The Allstate Corporation ALL are trading at a multiple higher than the industry average, while CNA Financial Corporation CNA shares are trading at a discount.

Projections for NMIH

The Zacks Consensus Estimate for NMIH’s 2025 earnings per share indicates a year-over-year increase of 9.1%. The consensus estimate for revenues is pegged at $698.3 billion. The consensus estimate for 2026 earnings per share and revenues indicates rallies of 3.6% and 4.5%, respectively, from the corresponding 2025 estimates. The expected long-term earnings growth is pegged at 7.1%.

Optimistic Analyst Sentiment on NMIH

The Zacks Consensus Estimate for 2025 earnings has moved up 1.7% in the past 30 days.

Average Target Price for NMIH Suggests Upside

Based on short-term price targets offered by seven analysts, the Zacks average price target is $42.71 per share. The average suggests a 7.6% upside from the last closing price.

Key Points For NMIH

NMI Holdings is positioned to capture long-term value by aligning favorable market dynamics with strong execution. On the market side, resilient housing demand, a rising reliance on private mortgage insurance, and consistent opportunities for new business and insurance-in-force expansion are creating a supportive backdrop.

To capitalize on these trends, the company emphasizes a culture centered on customers and innovation, while maintaining disciplined portfolio growth and operational efficiency. This balanced approach enhances profitability, strengthens capital and ultimately drives sustainable shareholder returns.

Positioned to leverage one of the world’s largest residential mortgage markets, NMIH is strategically enhancing its presence by broadening its customer network, deepening long-term partnerships and strengthening its portfolio of prime residential loans. By emphasizing financial resilience, sustainable profitability and client-focused growth, the company is steadily consolidating its leadership within the private mortgage insurance space.

Despite favorable growth drivers, the company is seeing higher claim costs due to increased defaults from a larger policy base, portfolio seasoning and higher reserves per default outside disaster areas. Looking ahead, a rise in defaults is expected to lift claims and reserve requirements, which may weigh on margins. In addition, competitive actions such as repricing, portfolio restructuring, or revised underwriting practices aimed at capturing market share from government or private insurers may pressure NMI Holdings’ revenues while hiking operating costs.

NMI Holdings’ debt burden has been gradually trending upward to $416 million as of June 30, 2025. The reported number saw a 0.1% increase from the end of 2024. Consistent debt servicing remains essential, as any disruption can undermine the company’s credit profile and financial flexibility.

Conclusion

NMI Holdings is steadily building long-term value by leveraging resilient housing demand, expanding its prime loan portfolio and deepening customer relationships. Its disciplined execution and focus on profitability strengthen capital and support sustainable returns. However, rising claims costs, competitive pressures and a growing debt burden temper the upside.

Ongoing headwinds limit meaningful upside for NMI Holdings. It is therefore wise to adopt a wait-and-see approach on this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research