NMI Holdings’ third quarter results came in ahead of Wall Street’s revenue expectations, but the market responded negatively, with the stock trading down after the announcement. Management attributed the quarter’s outcome to disciplined expense management, robust insured portfolio growth, and the continued resilience of the U.S. housing market. CEO Adam Pollitzer highlighted, “We have an exceptionally high-quality insured portfolio covered by a comprehensive set of risk transfer solutions and our credit performance continues to stand ahead.” However, he noted that the company remains attentive to ongoing macroeconomic risks and the normalization of credit experience.
Is now the time to buy NMIH? Find out in our full research report (it’s free for active Edge members).
NMI Holdings (NMIH) Q3 CY2025 Highlights:
- Revenue: $178.7 million vs analyst estimates of $177.4 million (7.6% year-on-year growth, 0.7% beat)
- Adjusted EPS: $1.21 vs analyst estimates of $1.21 (in line)
- Adjusted Operating Income: $130.8 million (73.2% margin, 3.5% year-on-year growth)
- Operating Margin: 73.2%, down from 76.1% in the same quarter last year
- Market Capitalization: $2.89 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From NMI Holdings’s Q3 Earnings Call
- Terry Ma (Barclays) asked about the decline in the pace of new defaults and future expectations. CEO Adam Pollitzer explained that muted seasonality and portfolio quality were key, but he expects seasonality to continue impacting defaults.
- Terry Ma (Barclays) inquired about the threat from potential new entrants in the mortgage insurance market. Pollitzer said incumbents serve the market well and emphasized the significant challenges for any new competitor.
- Bose George (KBW) asked about consumer strength and housing markets at risk. Pollitzer responded that macro and housing market trends remain resilient, with some regional softness persisting in the Sunbelt and Mountain West.
- Bose George (KBW) requested an update on reinsurance market dynamics. CFO Aurora Swithenbank highlighted robust traditional reinsurance markets and the company’s preference for forward coverage.
- Mark Hughes (Truist) queried about persistency and expense ratio sustainability in different rate environments. Swithenbank confirmed the expense ratio was not impacted by one-time items, and Pollitzer discussed the puts and takes of refinancing on persistency and new business.
Catalysts in Upcoming Quarters
In the upcoming quarters, the StockStory team will watch (1) shifts in NIW and persistency rates as interest rates fluctuate and refinancing cycles emerge, (2) developments in expense and yield management as the company seeks to maintain efficiency, and (3) any signs of changing competitive dynamics from new entrants or evolving reinsurance market conditions. Ongoing credit performance and regional housing market trends will also be key indicators of execution.
NMI Holdings currently trades at $34.96, down from $37.52 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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