NMIH Gains 20.9% in Three Months: What Investors Should Know?

Shares of NMI Holdings Inc. NMIH have gained 20.9% in the past three months, outperforming the industry’s growth of 5.5%. The stock closed at $45.66 per share on Wednesday, near its 52-week high of $46.74, reflecting investor confidence.

NMIH stock performance was supported by rapid IIF growth, strong new business generation, higher premiums, lower claims and solid ROE. Record second-quarter earnings, a strong capital position and ongoing share repurchases further boosted investor confidence. Additionally, the stock’s discounted valuation leaves room for further appreciation.

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Shares of other industry players like First American Financial Corporation FAF and RenaissanceRe Holdings Ltd. RNR have gained 6.7% and 4.7%, respectively, while Axis Capital Holdings Limited AXS has lost 2.7% in the past three months.

NMIH’s Average Target Price Suggests Upside

Based on short-term price targets offered by seven analysts, the Zacks average price target is $48.86 per share. The average suggests a potential 7% upside from the last closing price.

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NMIH’s Attractive Valuation

Shares of NMIH are trading at a discount compared with the industry. Its trailing 12-month price-to-book value of 1.27X is lower than the industry average of 1.42X. The stock has a Value Score of B.

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NMIH’s Encouraging Growth Projection

The Zacks Consensus Estimate for NMI Holdings’ 2026 earnings per share (EPS) indicates a year-over-year increase of 6.7%. The consensus estimate for revenues is pegged at $752.36 million, implying a year-over-year improvement of 6.5%.

The consensus estimate for 2027 EPS and revenues indicates an increase of 4.7% and 2.3%, respectively, from the corresponding 2026 estimates.The expected long-term earnings growth rate is 7.1%.

Optimistic Analyst Sentiment on NMIH

The company has seen one upward earnings estimate revision for 2026 and 2027, respectively, over the past 30 days, with no downward revisions. Thus, the Zacks Consensus Estimate for 2026 and 2027 earnings has moved up 2.7% and 2%, respectively, over the same period.

NMI Holdings’ Favorable Return on Capital

Return on equity (ROE) for the trailing 12 months was 15.2%, which compared favorably with the industry’s 7.4%. This reflects its efficiency in utilizing shareholders’ funds.

Key Points to Note for NMIH

NMIH continues to gain from new business opportunities, resilient housing conditions and sustained demand for private mortgage insurance. New insurance written rose to $16.1 billion in the second quarter of 2026 from $12.5 billion a year ago, driven by strong customer relationships, deeper account penetration and new customer wins. Continued growth in the mortgage insurance market should expand NMIH’s portfolio and support future premium and earnings growth.

Growth in insurance in force (IIF) remains a key driver for NMIH. In the second quarter, primary insurance in force increased 5.8% year over year to $227.1 billion, reflecting continued growth in its insured portfolio. Supported by this portfolio growth, net premiums earned increased to $157.5 million in the second quarter of 2026 from $149.1 million a year ago. Continued growth in IIF, along with the seasoning of existing policies, should provide a growing base of premium income and support overall earnings.

NMIH continues to benefit from favorable credit performance and operating discipline. The loss ratio improved 70 basis points to 8.3% in the second quarter of 2026, while the default rate remained low at 1.16%. Insurance claims and claim expenses also declined 2.2% year over year to $13.1 million in the second quarter, supporting underwriting profitability. Management expects seasonal increases in defaults during the second half of 2026. But continued expense control, strong portfolio credit quality and lower claims should support margins and earnings growth.

NMIH benefits from strong reinsurance capacity and attractive terms, using quota-share, excess-of-loss and insurance-linked note structures to manage credit risk and capital requirements. The flexible terms and forward-flow capacity of up to three years provide greater certainty for capital planning. Its diversified reinsurance and risk-transfer strategy also helps to limit credit risk.

NMIH maintains a strong capital position, providing financial flexibility to support growth and shareholder returns. At June 30, 2026, total PMIERs available assets were $3.7 billion against $2.1 billion of net risk-based required assets. NMIH also repurchased $31.4 million of shares in the second quarter of 2026. A 15.9% ROE further highlights efficient capital deployment and strong earnings generation. Continued buybacks could support EPS growth and enhance book value per share. Book value per share, excluding unrealized investment gains, increased 15% year over year to $36.88.

End Notes

NMI Holdings is well-positioned for growth from new primary insurance written, direct primary insurance in force, a comprehensive reinsurance program and credit performance. A strong capital position, along with buybacks, adds to shareholder and book value.

Coupled with higher return on equity, favorable growth estimates, optimistic analyst sentiment and the affordability of shares, the time appears right for potential investors to bet on this Zacks Rank #2 (Buy) 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).

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