Essent Group Ltd. (NYSE:ESNT) is one of the 13 Deep Value Stocks to Buy Right Now. Bank of America, on February 17, slightly increased its target price on Essent Group by 3.0% to $68 (from $66) and reiterated its Buy recommendation on the stock. The target price update comes after the firm adjusted its FY26 and FY27 earnings per share forecasts, following the release of Essent’s Q4 results, which fell slightly below the firm’s own forecasts. The firm, however, emphasized that it did not view the miss as “ ...

Performance was driven by positive credit trends and the benefit of higher interest rates on both persistency and investment income. Management attributes the 13% book value growth to a 'buy, manage, and distribute' model that prioritizes unit economics over volume. Persistency remains high at 86% because roughly 60% of the in-force portfolio has a note rate of 6% or lower, creating a 'lock-in' effect. The portfolio default rate increase is characterized as normal seasonality and the expected season ...

Core Insights - Essent Group reported strong financial results for the fourth quarter and full year of 2025, driven by positive credit trends and higher interest rates, leading to increased persistency and investment income [4][20] - The company expects modest growth in earned premium and insurance in force due to a challenging rate environment and high mortgage rates [2][18] Financial Performance - Fourth-quarter net income was $155 million, translating to $1.60 per diluted share, while full-year net income reached $690 million or $6.90 per diluted share, with a 12% return on average equity [3][7] - Book value per share increased by 13% year-over-year to $60.31, and mortgage insurance in force totaled $248 billion, up 2% from the previous year [2][7] - The company returned nearly $700 million to shareholders in 2025 through dividends and share repurchases, with a 13% increase in the quarterly dividend to $0.35 per share starting in Q1 2026 [15][16] Mortgage Insurance Metrics - Mortgage insurance in force ended the fourth quarter at $248.4 billion, down $452 million from the previous quarter but up $4.7 billion (1.9%) from the previous year [1][2] - Persistency was reported at 85.7% as of December 31, 2025, slightly down from 86% at the end of the third quarter [1][2] - The default rate for mortgage insurance was 2.5%, an increase of 21 basis points from the previous quarter, attributed to normal seasonality and an aging portfolio [8][6] Reinsurance and Capital Deployment - Approximately 98% of the mortgage insurance portfolio is reinsured, with Essent Re generating nearly $80 million in third-party net income on $2.3 billion of risk [5][11] - The company is expanding into Lloyd's-backed quota share property and casualty reinsurance, expecting to write $100–150 million in premium, with two-thirds earned in 2026 [5][12] Operating Expenses - Mortgage insurance operating expenses for the fourth quarter were $34.3 million, with an expense ratio of 16.1%, compared to $31.2 million and 14.4% in the prior quarter [9] - Full-year operating expenses for the mortgage insurance segment were $140 million, with expectations of approximately $145 million for 2026 [9] Management Outlook - Management anticipates modest near-term growth in earned premium and insurance in force, emphasizing a focus on unit economics over market share [18][20] - The company has not observed significant credit performance issues across different vintages or states, although Florida showed slightly higher concerns due to hurricanes [19]

Economic Indicators - The number of Americans filing for initial jobless claims fell by 5,000 to 227,000, compared to the expected 222,000 [2] - U.S. existing home sales decreased by 8.4% month-over-month to a 16-month low of 3.91 million, weaker than the expected 4.16 million [2] - The Consumer Price Index (CPI) rose 2.4% annually, a notable drop from the previous month, with a monthly increase of 0.2% [5] Stock Market Performance - Wall Street's major indices ended in the red, with significant declines in the Magnificent Seven stocks, including Apple (AAPL) down 5% and Tesla (TSLA) down over 2% [4] - Cisco Systems (CSCO) plunged over 12% after reporting weaker-than-expected FQ2 adjusted gross margin and issuing tepid FQ3 guidance [4] - Equinix (EQIX) surged over 10% after issuing strong FY26 guidance, marking it as the top percentage gainer on the S&P 500 [4] Corporate Earnings - Notable companies such as Moderna (MRNA) and Advance Auto Parts (AAP) are set to release their quarterly results [6] - Pinterest (PINS) plunged over 19% in pre-market trading after reporting weaker-than-expected Q4 revenue and issuing below-consensus Q1 revenue guidance [13] - Applied Materials (AMAT) surged over 11% in pre-market trading after posting stronger-than-expected FQ1 results and issuing strong FQ2 guidance [13] International Market Developments - The Euro Stoxx 50 Index is down 0.09% as investors digest fresh corporate earnings reports and await key U.S. inflation data [7] - Eurozone's GDP growth for the fourth quarter stood at 0.3%, in line with preliminary estimates [8] - Spain's annual inflation rate eased more than expected in January, with CPI falling 0.4% month-over-month and rising 2.3% year-over-year [8] Pre-Market Movements - U.S. steel stocks slid in pre-market trading after reports of President Trump's plans to roll back some tariffs on steel and aluminum products, with Steel Dynamics (STLD) down over 4% [12] - Most chip stocks are moving lower in pre-market trading, with Micron Technology (MU) and Intel (INTC) falling more than 1% [12]

Core Viewpoint - Allstate reported quarterly earnings of $14.31 per share, significantly exceeding the Zacks Consensus Estimate of $9.82 per share, and showing a year-over-year increase from $7.67 per share, indicating strong performance in the latest quarter [1] Financial Performance - The company achieved an earnings surprise of +45.77% for the quarter, following a previous surprise of +36.22% when it reported earnings of $11.17 per share against an expectation of $8.2 per share [1][2] - Allstate's revenues for the quarter were $17.27 billion, which fell short of the Zacks Consensus Estimate by 1.43%, but represented an increase from $16.71 billion in the same quarter last year [2] Stock Performance - Allstate shares have declined approximately 3.1% since the beginning of the year, contrasting with the S&P 500's gain of 1.1% [3] - The current Zacks Rank for Allstate is 3 (Hold), indicating that the stock is expected to perform in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $6.91, with projected revenues of $17.75 billion, and for the current fiscal year, the EPS estimate is $24.20 on revenues of $72.77 billion [7] - The trend of earnings estimate revisions for Allstate was mixed prior to the earnings release, which may change following the latest results [6] Industry Context - The Insurance - Property and Casualty industry, to which Allstate belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Company Overview - Essent Group Ltd. is a Bermuda-based holding company that provides private mortgage insurance, reinsurance, title insurance, and settlement services for mortgage lenders, borrowers, and investors [5]. Financial Performance - In Q3 2025, Essent reported a net income of $164 million, with diluted earnings per share (EPS) of $1.67 [3]. - The company's US mortgage insurance in force increased to $249 billion, reflecting a 2% growth from the previous year, while persistency remained strong at 86% [3]. Shareholder Returns - Chairman and CEO Mark Casale emphasized Essent's robust capital position, noting that the company repurchased nearly 9 million shares for over $500 million year-to-date through October 31 [4]. - A new share repurchase authorization of $500 million has been announced, which will be effective through year-end 2027, alongside a Q4 dividend of $0.31 per share [4]. Market Outlook - JPMorgan analyst Richard Shane raised the price target for Essent Group to $66 from $65, maintaining a Neutral rating, amid updated ratings and price targets across the consumer finance sector [2]. - The analyst highlighted potential volatility in the sector due to President Trump's proposal to cap credit card interest rates at 10% for one year, which could significantly impact issuer profitability and consumer credit access [2].

Core Insights - Essent Group's Q3 CY2025 results fell short of market expectations, with revenue declining 1.5% year-on-year to $311.8 million and GAAP EPS of $1.67, which was 5.5% below analyst estimates [1][5]. Financial Performance - Revenue: $311.8 million vs analyst estimates of $317 million (1.5% year-on-year decline, 1.6% miss) [5] - EPS (GAAP): $1.67 vs analyst expectations of $1.76 (5.5% miss) [5] - Adjusted Operating Income: $199.2 million vs analyst estimates of $257.6 million (63.9% margin, 22.7% miss) [5] - Operating Margin: 63.9%, down from 65.6% in the same quarter last year [5] - Market Capitalization: $5.96 billion [5] Management Commentary - Management attributed the revenue shortfall to higher loan default provisions and increased claim severity, while maintaining that the underlying credit quality remains strong with a weighted average FICO score of 746 [3][4]. - CEO Mark Casale noted that the increase in default rates was seasonal and there were no concerning geographic or vintage trends impacting credit performance [3][6]. - CFO David Weinstock emphasized the company's strong balance sheet and commitment to a conservative capital strategy to navigate market volatility [3]. Key Operational Insights - Default provisions increased due to larger average loan sizes, not due to deteriorating credit trends [6]. - Claims severity rose modestly but remained below reserves, attributed to timing in claims processing [6]. - The average base premium rate for U.S. mortgage insurance remained stable, reflecting consistent pricing despite market competition [6]. - Significant share repurchase activity and a new $500 million authorization through 2027 were highlighted, along with a quarterly dividend increase [6]. Strategic Adjustments - Essent raised its quota share reinsurance level to 25%, which may increase volatility in ceded premiums and affect reported margins, aimed at optimizing capital efficiency without compromising credit risk management [7].

Core Insights - Outfront Media reported quarterly funds from operations (FFO) of $0.57 per share, exceeding the Zacks Consensus Estimate of $0.50 per share and up from $0.49 per share a year ago [1][2] - The company achieved an FFO surprise of +13.78% for the quarter, having previously reported an FFO of $0.51 per share against an expectation of $0.46 per share, resulting in a surprise of +10.87% [2] - Revenues for the quarter ended September 2025 were $467.5 million, surpassing the Zacks Consensus Estimate by 2.40% and up from $451.9 million year-over-year [3] Financial Performance - Outfront Media has surpassed consensus FFO estimates three times over the last four quarters [2] - The company has topped consensus revenue estimates two times in the last four quarters [3] - The current consensus FFO estimate for the upcoming quarter is $0.75 on revenues of $499 million, and for the current fiscal year, it is $1.89 on revenues of $1.81 billion [8] Market Position - Outfront Media shares have declined approximately 3.2% year-to-date, contrasting with the S&P 500's gain of 15.6% [4] - The Zacks Industry Rank places the REIT and Equity Trust - Other sector in the top 30% of over 250 Zacks industries, indicating a favorable industry outlook [9] Future Outlook - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and future FFO expectations [4] - The estimate revisions trend for Outfront Media was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it will perform in line with the market [7]

Core Insights - Heritage Insurance (HRTG) reported quarterly earnings of $1.63 per share, significantly exceeding the Zacks Consensus Estimate of $0.53 per share, and up from $0.27 per share a year ago [1][2] - The earnings surprise of +207.55% marks the fourth consecutive quarter where the company has surpassed consensus EPS estimates [2] - The company generated revenues of $212.46 million for the quarter, slightly above the Zacks Consensus Estimate by 1.11%, and compared to $211.85 million in the same quarter last year [3] Financial Performance - Heritage Insurance's earnings surprise of +207.55% indicates strong performance relative to expectations [2] - The company has consistently outperformed revenue estimates, achieving this in two of the last four quarters [3] - Year-to-date, Heritage Insurance shares have increased by approximately 97.6%, outperforming the S&P 500's gain of 15.1% [4] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.04, with expected revenues of $212.56 million, and for the current fiscal year, the EPS estimate is $4.10 on revenues of $842.24 million [8] - The estimate revisions trend for Heritage Insurance was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market [7] - The outlook for the property and casualty insurance industry is favorable, with the Zacks Industry Rank placing it in the top 26% of over 250 industries, indicating potential for outperformance [9]

Core Insights - The Allstate Corporation (ALL) is set to release its third-quarter 2025 results on November 5, with earnings estimated at $8.20 per share, more than double the prior-year quarter's figure [1][5] - The revenue consensus estimate stands at $17.4 billion, reflecting a 5.9% growth from the same quarter last year [2] Earnings Estimates and Revisions - The third-quarter earnings estimate has seen four upward revisions in the last 30 days, with no downward movements [2] - Allstate has an Earnings ESP of 0.00% and currently holds a Zacks Rank of 3 (Hold) [4] Historical Performance - Allstate has consistently beaten earnings estimates in the past four quarters, with an average surprise of 57.67% [3] Revenue Drivers - Revenue growth is expected to be driven by improved net premiums earned due to higher policies in force, with net earned premiums projected to grow 8.3% year over year to $15.5 billion [5][6] - The Property-Liability segment is anticipated to benefit from higher earned premiums, with a consensus estimate of $14.8 billion, indicating a 7.8% increase from the previous year [7] Investment Income - Net investment income is expected to rise to $832 million, marking a 6.3% improvement from the prior-year quarter [6] Underwriting Challenges - Catastrophe losses are projected to impact underwriting results, with management forecasting pre-tax catastrophe losses of $558 million for the quarter [8] - Claims expenses are expected to increase by 2.7% year over year to $10.7 billion, which may pressure overall margins [10] Segment Performance - The Protection Services segment is expected to see revenue growth, with estimates pegged at $899 million, reflecting an 8.1% increase from the prior-year quarter [9]