It's been a good week for NMI Holdings, Inc. (NASDAQ:NMIH) shareholders, because the company has just released its latest quarterly results, and the shares gained 5.4% to US$32.47. NMI Holdings reported US$156m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.08 beat expectations, being 9.4% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on NMI Holdings after the latest results.
Taking into account the latest results, the most recent consensus for NMI Holdings from seven analysts is for revenues of US$639.9m in 2024. If met, it would imply a satisfactory 6.9% increase on its revenue over the past 12 months. Statutory per-share earnings are expected to be US$4.26, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$632.6m and earnings per share (EPS) of US$4.10 in 2024. So the consensus seems to have become somewhat more optimistic on NMI Holdings' earnings potential following these results.
The consensus price target was unchanged at US$36.38, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic NMI Holdings analyst has a price target of US$40.00 per share, while the most pessimistic values it at US$33.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting NMI Holdings is an easy business to forecast or the the analysts are all using similar assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 9.3% growth on an annualised basis. That is in line with its 11% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.1% annually. So although NMI Holdings is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around NMI Holdings' earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for NMI Holdings going out to 2026, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for NMI Holdings that you need to take into consideration.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.