NMI Holdings, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

NMI Holdings, Inc. (NASDAQ:NMIH) shareholders are probably feeling a little disappointed, since its shares fell 4.3% to US$37.69 in the week after its latest second-quarter results. The result was positive overall - although revenues of US$162m were in line with what the analysts predicted, NMI Holdings surprised by delivering a statutory profit of US$1.13 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for NMI Holdings

Following the latest results, NMI Holdings' six analysts are now forecasting revenues of US$649.8m in 2024. This would be a modest 5.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 2.8% to US$4.50. In the lead-up to this report, the analysts had been modelling revenues of US$641.0m and earnings per share (EPS) of US$4.29 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 8.1% to US$41.50. 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. Currently, the most bullish analyst values NMI Holdings at US$47.00 per share, while the most bearish prices it at US$36.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of NMI Holdings'historical trends, as the 11% annualised revenue growth to the end of 2024 is roughly in line with the 11% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 3.8% per year. So it's pretty clear that NMI Holdings is forecast to grow substantially faster than its 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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. We have estimates - from multiple NMI Holdings analysts - going out to 2026, and you can see them free on our platform here.

You can also view our analysis of NMI Holdings' balance sheet, and whether we think NMI Holdings is carrying too much debt, for free on our platform here.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com