STC Q3 Deep Dive: Agency and Commercial Gains Offset Housing Market Headwinds

Title insurance provider Stewart Information Services (NYSE:STC) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 19.1% year on year to $795.7 million. Its GAAP profit of $1.55 per share increased from $1.07 in the same quarter last year.

Is now the time to buy STC? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Stewart Information Services delivered year-on-year revenue and profit growth in Q3, but the market responded negatively to the results. Management highlighted strong performance in agency services and commercial operations as key drivers, with CEO Frederick Eppinger noting, “Our 19% revenue growth and 40% earnings growth reflect the efforts we have made to continue to grow the company even while facing prolonged headwinds from the historically low housing market.” Despite these gains, persistent challenges in the residential sector and cautious commentary around macroeconomic volatility appear to have weighed on investor sentiment.

Looking ahead, Stewart’s outlook is shaped by expectations for a gradual housing market recovery and continued momentum in targeted business lines. Eppinger emphasized, “We believe the housing market will continually to gradually improve over the coming year, and '26 will be the beginning of a transition back towards a more normal existing home sales environment.” Management is prioritizing geographic and channel expansion, talent acquisition, and targeted acquisitions to sustain growth, while also noting that improvements in commercial and agency operations should position the company well as market conditions evolve.

Key Insights from Management’s Remarks

Management attributed the quarter’s growth to share gains in agency services, expansion into new commercial markets, and improved operational efficiency.

• Agency services share gains: Stewart reported significant traction in agency operations, particularly within 15 targeted states, with Eppinger citing increased penetration and improved technology as reasons for stronger relationships with both new and existing agents.
• Commercial market expansion: The National Commercial Services segment benefited from broader asset class exposure, especially in energy, data centers, and hospitality, with commercial revenues growing 17% domestically. Management noted improvement in commercial service delivery beyond New York, which had historically been a limitation.
• Direct operations resilience: The direct operations unit showed 8% growth despite ongoing softness in residential housing, supported by efforts to pick up share in small commercial transactions and targeted micro-markets.
• Real Estate Solutions margin recovery: The Real Estate Solutions business returned to low-teens margins after resolving earlier challenges with pricing and data contract renegotiations. Management expects further improvement as volumes recover and customer relationships deepen.
• Dividend increase signals confidence: Stewart announced its fifth consecutive annual dividend increase, raising the payout to $2.10 per share, reflecting management’s ongoing commitment to shareholder returns amid uncertain market conditions.

Drivers of Future Performance

Stewart’s outlook for the next year centers on gradual housing market improvement, increased commercial activity, and disciplined cost management.

• Housing market recovery: Management believes a slow return to normalcy in existing home sales, with inventory growth and cooling price appreciation, will create a more favorable environment for Stewart’s core title and agency businesses.
• Commercial and agency momentum: Continued penetration into new commercial asset classes and geographic markets, alongside sustained agency share gains in targeted states, are expected to drive incremental growth even if the residential market remains subdued.
• Operational leverage and risk factors: Stewart’s recent operational improvements should help maintain margins as volumes recover, but management flagged potential headwinds from further interest rate cuts impacting investment income and ongoing macroeconomic volatility that could affect transaction volumes.

Catalysts in Upcoming Quarters

In the coming quarters, StockStory analysts will closely watch (1) signs of sustained agency share gains in targeted states and further commercial market penetration, (2) evidence of housing market stabilization and its impact on residential transaction volumes, and (3) Stewart’s ability to preserve or expand margins amid shifting rate and volume dynamics. Progress on targeted acquisitions and talent investments will also be key drivers of long-term performance.

Stewart Information Services currently trades at $72.76, down from $75.18 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members).

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