NMIH Outperforms Industry, Trades Near 52-Week High: Time to Hold?

Shares of NMI Holdings Inc. NMIH have gained 15.1% in the past year, outperforming the industry’s growth of 7.8%.

NMIH has outperformed its peers, American Financial Group, Inc. AFG and Cincinnati Financial Corporation CINF, which have gained 2.6% and 13.8%, respectively, in the past year, while Kinsale Capital Group, Inc. KNSL has lost 5.6%.

The insurer has a market capitalization of $3.19 billion. The average volume of shares traded in the last three months was 0.4 million.

Shares of NMI Holdings closed at $41.21 on Monday, near its 52-week high of $43.20. This proximity underscores investor confidence. It has the ingredients for further price appreciation. The stock is trading above the 50-day and 200-day simple moving averages (SMA) of $38.34 and $38.08, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.

Earnings of NMI Holdings grew 15.7% in the last five years. NMIH has a solid surprise history. The insurer has a solid track record of beating earnings estimates in two of the last four quarters, while missing in one and matching in one, with an average of 4.48%.

Attractive Valuation of NMIH

NMI Holdings’ shares are trading at a discount compared to the industry. Its forward price-to-book value of 1.26X is lower than the industry average of 1.48X, the Finance sector’s 4.32X and the Zacks S&P 500 Composite’s 8.52X. Also, it has a Value Score of A.

NMIH’s Encouraging Growth Projection

The Zacks Consensus Estimate for NMI Holdings’ 2025 earnings per share indicates a year-over-year increase of 8.6%. The consensus estimate for revenues is pegged at $704.54 million, implying a year-over-year improvement of 7.9%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 3.1% and 4.9%, respectively, from the corresponding 2025 estimates.

Average Target Price for NMIH Suggests Upside

Based on short-term price targets offered by seven analysts, the Zacks average price target is $44.71 per share. The average suggests a potential 10.1% upside from the last closing price.

NMI Holdings’ Favorable Return on Capital

Return on equity (ROE) for the trailing 12 months was 16.08%, which compared favorably with the industry’s 8.04%. This reflects its efficiency in utilizing shareholders’ funds.

Key Points to Note for NMIH

NMIH stands to gain from new business opportunities in a growing mortgage insurance market. NMI Holdings’ mortgage insurance portfolio is expected to create a strong foundation for future earnings.

Growth in monthly and single premium policy production is tied to the increased penetration of existing customer accounts. New customer account activation will also drive results. 

In order to enhance its return profile, absorb losses, provide efficient growth capital and mitigate the impact of credit volatility, NMI Holdings has a comprehensive reinsurance program for its in-force portfolio.

To drive margin expansion, NMIH remains focused on efficiency and expense management. In February 2025, the board authorized a new $250 million share repurchase program effective through Dec. 31, 2027, and an extension of the existing share repurchase programs through Dec. 31, 2027, to align its remaining tenor with that of the new $250 million program. As of Sept. 30, 2025, we had $256.4 million of repurchase authority remaining. 

All these together should help the insurer continue to generate solid mid-teens shareholders’ returns.

End Notes

NMI Holdings is well-positioned for growth on new primary insurance written, direct primary insurance in force and a comprehensive reinsurance program. 

NMIH should also benefit from a higher return on capital, favorable growth estimates, and the affordability of shares. It is, therefore, wise to hold on to this Zacks Rank #3 (Hold) stock at present. 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