NMI Holdings Trades Above 50-Day SMA: Time to Hold NMIH Stock?

Core Viewpoint - NMI Holdings Inc. (NMIH) is experiencing a short-term bullish trend, trading above its 50-day simple moving average, despite a recent decline in share price from its 52-week high [1] Valuation and Market Position - NMIH shares are trading at a price-to-book multiple of 1.25X, which is lower than the industry average of 1.52X, the Finance sector's 4.11X, and the Zacks S&P 500 Composite's 7.8X, indicating attractive valuation [4] - The company has a market capitalization of $2.90 billion, with an average trading volume of 0.6 million shares over the last three months [6] Performance Metrics - NMIH's shares have gained 10.3% over the past year, lagging behind the industry's growth of 19.8%, the Finance sector's return of 16.8%, and the S&P 500 composite's appreciation of 11.1% [7][9] - The Zacks Consensus Estimate for NMIH's 2025 earnings per share indicates a year-over-year increase of 7.1%, with revenues expected to reach $686.01 million, reflecting a 5.4% improvement [10] - The expected long-term earnings growth rate for NMIH is 6.10%, which is slightly below the industry average of 6.9% [11] Return on Capital - NMIH's return on equity (ROE) for the trailing 12 months was 17.27%, significantly higher than the industry's 7.7%, showcasing efficient use of shareholders' funds [12] Growth Opportunities - NMIH is positioned to benefit from new business opportunities in the growing mortgage insurance market, with expectations of increased production in monthly and single premium policies [13] - The company has a comprehensive reinsurance program to enhance its return profile and manage credit volatility [14] Shareholder Returns - NMIH has engaged in share buybacks, repurchasing a total of $245 million of shares, with $80 million of repurchase capacity remaining [14] - These strategies are expected to help the insurer generate solid mid-teens returns for shareholders [15] Overall Outlook - NMIH is well-positioned for growth due to new primary insurance written, a comprehensive reinsurance program, and favorable growth estimates [16] - The stock has a VGM Score of A, indicating attractive value, growth, and momentum, suggesting it is wise to hold onto this stock [18]