Shares of NMI Holdings Inc. NMIH have gained 13.4% in the past six months, outperforming the industry’s growth of 6.9%. The stock closed at $42.19 on Wednesday, near its 52-week high of $46.74, reflecting investor confidence.
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The stock is also trading above the 200-day simple moving average (SMA) of $40.14, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
NMIH stock performance was supported by rapid insurance in force growth, strong new business generation, higher premiums, lower claims and solid return on equity. 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.
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 six months.
NMIH’s Average Target Price Suggests Upside
Based on short-term price targets offered by eight analysts, the Zacks average price target is $49.50 per share. The average suggests a potential 16.7% upside from the last closing price.
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 1.17X 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 $753.80 million, implying a year-over-year improvement of 6.7%.
The consensus estimate for 2027 EPS and revenues indicates an increase of 4.7% and 2.5%, 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 five upward earnings estimate revisions for 2026 and four for 2027 earnings, over the past 60 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.
NMIH s’ Favorable Return on Equity
Return on equity for the trailing 12 months was 15.1%, which compared favorably with the industry’s 7.5%, reflecting 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, supported 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 premium and earnings growth.
Growth in 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 expense 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. Although defaults are expected to rise seasonally in the second half of 2026, strong portfolio credit quality and lower claims should support margins and earnings growth.
Strong reinsurance capacity helps NMIH manage credit risk and capital requirements. The company uses quota-share, excess-of-loss and insurance-linked note structures, along with the forward-flow capacity of up to three years. Its diversified risk-transfer program provides greater flexibility in managing capital and mortgage-credit exposure.
NMIH maintains a strong capital position and continues to return capital to shareholders. As of June 30, 2026, PMIERs available assets stood at $3.7 billion versus $2.1 billion of required assets. The company repurchased $31.4 million of shares in the second quarter. Meanwhile, ROE was 15.9%, while book value per share, excluding unrealized investment gains, increased 15% year over year to $36.88. Continued buybacks could support EPS and book value growth.
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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NMI Holdings Inc (NMIH): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).