Enact Holdings (ACT): Assessing Valuation After Raised 2025 Capital Return Guidance and Major Credit Upgrades

Enact Holdings (ACT) just posted its third quarter results, and the news is drawing investor attention. With capital return guidance raised to around $500 million for 2025, a new $435 million credit facility, and upgrades from Moody’s and A.M. Best, the company is emphasizing both financial flexibility and credit strength.

See our latest analysis for Enact Holdings.

Enact Holdings is attracting renewed optimism as shares climbed 14.5% year-to-date, supported by robust third-quarter results, fresh upgrades from major credit agencies, and a higher 2025 capital return target. While the company’s three-year total shareholder return stands at a strong 65%, recent momentum suggests investors are warming to its disciplined strategy and greater capital flexibility.

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With shares outperforming in 2025 and capital returns set to rise, is Enact Holdings trading at a bargain compared to its future potential, or has the market already priced in all the good news?

Most Popular Narrative: 7.5% Undervalued

With a fair value of $40.00 per share and a recent close of $37.00, the narrative signals room for upside, highlighting why some see overlooked value in Enact Holdings’ disciplined growth.

Persistent demographic tailwinds from millennial and Gen Z homebuyer demand, combined with a continued national supply-demand imbalance, are expected to support steady mortgage originations and boost Enact's insurance in force and premium volumes. This directly benefits revenue and long-term earnings growth. Ongoing home price appreciation, despite regional fluctuations, is providing borrowers with meaningful embedded equity. This not only reduces default risk and loss frequency but also drives reserve releases, supporting improved net margins and the potential for future earnings outperformance if current loss assumptions remain conservative.

Read the complete narrative.

What’s fueling this narrative’s optimism? The forecast rests on a rare mix of steady demand and robust financial discipline. Curious which financial assumptions actually drive that upbeat fair value? Unlock the story behind these projections in the full narrative.

Result: Fair Value of $40.00 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, rising mortgage rates or a slowdown in home price appreciation could quickly challenge the optimism reflected in these fair value projections.

Find out about the key risks to this Enact Holdings narrative.

Build Your Own Enact Holdings Narrative

If you want to dig deeper or believe your own analysis tells a different story, you can craft a personalized narrative in just a few minutes. Do it your way

A great starting point for your Enact Holdings research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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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.

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