NMIH Stock Trading at a Discount to Industry at 1.15X: Time to Buy?

NMI Holdings Inc. NMIH shares are trading at a discount compared with the Zacks Property and Casualty Insurance industry. Its forward price-to-book value of 1.15X is lower than the industry average of 1.45X, the Finance sector’s 4.23X, and the Zacks S&P 500 composite’s 8.29X. The stock has a Value Score of A. This style score helps find the most attractive value stocks. 

The insurer has a market capitalization of $2.97 billion. The average volume of shares traded in the last three months was 0.4 million. The insurer has a solid track record of beating earnings estimates in three of the past four quarters and matching in one, with an average of 6.02%.

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Shares of Axis Capital Holdings Limited AXS, First American Financial Corporation FAF and RenaissanceRe Holdings Ltd. RNR are also trading at a discount to the industry average.

NMIH is an Outperformer

Shares of NMIH have gained 9.2% in the past year against the industry’s decline of 1.7%.

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NMIH’s Encouraging Growth Projection

The Zacks Consensus Estimate for NMI Holdings’ 2026 earnings per share indicates a year-over-year increase of 4%. The consensus estimate for revenues is pegged at $739.34 million, implying a year-over-year improvement of 4.6%. The consensus estimate for 2027 earnings per share and revenues indicates an increase of 7.3% and 3.4%, respectively, from the corresponding 2026 estimates.

Optimist Analyst Sentiment on NMIH

Each of the four analysts covering the stock has raised estimates for 2026, and two of the four analysts have raised the same for 2027 over the past 60 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 earnings has moved up 1.6% and 0.7%, respectively, in the past 60 days.

Average Target Price for NMIH Suggests Upside

Based on short-term price targets offered by seven analysts, the Zacks average price target is $46.29 per share. The average suggests a potential 18% upside from the last closing price.

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NMI Holdings’ Favorable Return on Capital

Return on equity (ROE) for the trailing 12 months was 15.7%, 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 Dec.  31, 2025, it had $226 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. 

Coupled with the solid growth projections, as well as strong fundamentals and favorable return on capital, as well as optimistic analyst sentiment, the time appears right for potential investors to bet on this Zacks Rank #2 (Buy) insurer. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.