Enact Holdings (NASDAQ:ACT) Misses Q4 CY2025 Revenue Estimates

Mortgage insurance provider Enact Holdings (NASDAQ:ACT) fell short of the markets revenue expectations in Q4 CY2025 as sales only rose 1.2% year on year to $312.7 million. Its non-GAAP profit of $1.23 per share was 11.9% above analysts’ consensus estimates.

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“Enact delivered a strong fourth quarter, capping another successful year driven by disciplined execution, resilient credit performance, and a continued focus on long-term value creation,” said Rohit Gupta, President and CEO of Enact.

Company Overview

Playing a critical role in helping first-time homebuyers access the housing market, Enact Holdings (NASDAQ:ACT) provides private mortgage insurance that enables lenders to offer home loans with lower down payments while protecting against borrower defaults.

Revenue Growth

Insurers earn revenue three ways. The core insurance business itself, often called underwriting and represented in the income statement as premiums earned, is one way. Investment income from investing the “float” (premiums collected upfront not yet paid out as claims) in assets such as fixed-income assets and equities is the second way. Fees from various sources such as policy administration, annuities, or other value-added services is the third. Over the last five years, Enact Holdings grew its revenue at a sluggish 2.4% compounded annual growth rate. This was below our standards and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Enact Holdings’s annualized revenue growth of 3.4% over the last two years is above its five-year trend, but we were still disappointed by the results.

This quarter, Enact Holdings’s revenue grew by 1.2% year on year to $312.7 million, falling short of Wall Street’s estimates.

Net premiums earned made up 82.7% of the company’s total revenue during the last five years, meaning Enact Holdings barely relies on non-insurance activities to drive its overall growth.

Net premiums earned commands greater market attention due to its reliability and consistency, whereas investment and fee income are often seen as more volatile revenue streams that fluctuate with market conditions.

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Book Value Per Share (BVPS)

Insurance companies are balance sheet businesses, collecting premiums upfront and paying out claims over time. The float – premiums collected but not yet paid out – are invested, creating an asset base supported by a liability structure. Book value captures this dynamic by measuring:

• Assets (investment portfolio, cash, reinsurance recoverables) - liabilities (claim reserves, debt, future policy benefits)

BVPS is essentially the residual value for shareholders.

We therefore consider BVPS very important to track for insurers and a metric that sheds light on business quality. While other (and more commonly known) per-share metrics like EPS can sometimes be lumpy due to reserve releases or one-time items and can be managed or skewed while still following accounting rules, BVPS reflects long-term capital growth and is harder to manipulate.

Enact Holdings’s BVPS grew at an impressive 10.6% annual clip over the last four years. BVPS growth has also accelerated recently, growing by 13.8% annually over the last two years from $29.07 to $37.66 per share.

Key Takeaways from Enact Holdings’s Q4 Results

It was good to see Enact Holdings beat analysts’ EPS expectations this quarter. On the other hand, its revenue slightly missed. Overall, this print had some key positives. The stock remained flat at $40.33 immediately after reporting.

So should you invest in Enact Holdings right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).