Value
7.3/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 9.0 |
| P/S | 6.7 |
| Fwd P/E | 9.4 |
| PEG | 8.5 |
| Analyst target | 3.0 |
- ▸Forward P/E: 9.5x
- ▸PEG: 0.75
- ▸Attractively valued
ACT · Why this verdict
Why Enact Holdings (ACT) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. People who build TrendMatrix, or entities they control, may hold positions, long or short, in securities it covers, and may trade them at any time. Positions are not disclosed individually. Verdicts are generated by an automated model applied by the same rules to every covered stock, and are not adjusted for any position held by the people who build TrendMatrix. We do not accept payment from issuers for coverage.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictHOLD
Overall score5.7/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Enact Holdings is a high-quality specialty insurance franchise with exceptional margins and a consistent earnings beat record, but with only 1.8% headroom to near-term resistance, unfavorable risk/reward geometry, and 16% short interest, the current entry offers limited return potential.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Short interest at 16% of float creates a structural technical overhang that can suppress price appreciation and amplify downside moves, even if the underlying business remains healthy. Risk breakdown | Short interest falls below 8% of float, removing the structural overhang and allowing the stock to trade more freely on fundamental merit. | ↓Deteriorating |
| CounterA 16% short interest also represents potential fuel for a sharp squeeze if a positive catalyst materializes; continued earnings beats could force short covering and accelerate a move above current resistance more quickly than the overhang implies. | ||
The business delivers net margins of 54%, passes the Rule of 40 with a combined score of 49, and earns a Piotroski F-Score of 8 out of 9 — a quality profile that places it among the strongest franchises in specialty insurance. Quality breakdown | Net margins hold above 50% over the next four quarters, confirming that the profitability profile reflects structural underwriting discipline rather than a peak-cycle tailwind. | →Stable |
| CounterSpecialty mortgage insurance margins are sensitive to housing credit conditions; a deterioration in mortgage delinquency rates could compress the loss ratio and pull net margins below the current 54% level faster than the quality score suggests. | ||
The company has beaten consensus estimates in each of the last four quarters, averaging approximately 4.5% above expectations, with the most recent quarter delivering a positive surprise of 1.2% on an estimate of $1.20. Earnings | The next earnings print, due approximately July 29, 2026, extends the beat streak and keeps average positive surprises above 2% per quarter. | ↓Deteriorating |
| CounterThe two most recent beats were narrow — 1.2% and 0.9% — suggesting the margin of outperformance is compressing; weak growth noted in the bear case means the beat streak may reflect conservative guidance discipline more than underlying business acceleration. | ||
With only 1.8% headroom remaining to the near-term resistance level of $43.09 and a risk/reward ratio of 0.45-to-1, the current price offers little margin of safety for a new entry, making patience the more disciplined posture. Price targets | Analyst consensus price target rises above $48, restoring more than 10% upside from the current price of $42.34 and improving the risk/reward setup sufficiently to revisit a long. | Tripped↓Deteriorating |
| CounterBreaks above established resistance often accelerate quickly; if the stock clears $43.09 on strong earnings, the next resistance may be materially higher, and those who waited for a better entry may have missed the move. | ||
Short interest at 16% of float creates a structural technical overhang that can suppress price appreciation and amplify downside moves, even if the underlying business remains healthy.
↓DeterioratingRisk breakdown
- Expectation
- Short interest falls below 8% of float, removing the structural overhang and allowing the stock to trade more freely on fundamental merit.
CounterA 16% short interest also represents potential fuel for a sharp squeeze if a positive catalyst materializes; continued earnings beats could force short covering and accelerate a move above current resistance more quickly than the overhang implies.
The business delivers net margins of 54%, passes the Rule of 40 with a combined score of 49, and earns a Piotroski F-Score of 8 out of 9 — a quality profile that places it among the strongest franchises in specialty insurance.
→StableQuality breakdown
- Expectation
- Net margins hold above 50% over the next four quarters, confirming that the profitability profile reflects structural underwriting discipline rather than a peak-cycle tailwind.
CounterSpecialty mortgage insurance margins are sensitive to housing credit conditions; a deterioration in mortgage delinquency rates could compress the loss ratio and pull net margins below the current 54% level faster than the quality score suggests.
The company has beaten consensus estimates in each of the last four quarters, averaging approximately 4.5% above expectations, with the most recent quarter delivering a positive surprise of 1.2% on an estimate of $1.20.
↓DeterioratingEarnings
- Expectation
- The next earnings print, due approximately July 29, 2026, extends the beat streak and keeps average positive surprises above 2% per quarter.
CounterThe two most recent beats were narrow — 1.2% and 0.9% — suggesting the margin of outperformance is compressing; weak growth noted in the bear case means the beat streak may reflect conservative guidance discipline more than underlying business acceleration.
With only 1.8% headroom remaining to the near-term resistance level of $43.09 and a risk/reward ratio of 0.45-to-1, the current price offers little margin of safety for a new entry, making patience the more disciplined posture.
Tripped↓DeterioratingPrice targets
- Expectation
- Analyst consensus price target rises above $48, restoring more than 10% upside from the current price of $42.34 and improving the risk/reward setup sufficiently to revisit a long.
CounterBreaks above established resistance often accelerate quickly; if the stock clears $43.09 on strong earnings, the next resistance may be materially higher, and those who waited for a better entry may have missed the move.
Per-dimension breakdown
Quality
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.3 |
| ROA | 5.6 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 3.7 |
| FCF quality | 5.8 |
| Moat | 7.2 |
| Rule of 40 | 7.7 |
| Piotroski F | 8.9 |
- ▸Strong margins: 55%
- ▸Earnings quality warning: 76% FCF/NI
- ▸Rule of 40: 46 (pass)
- ▸Strong Piotroski F-Score: 8/9
Growth
4.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.5 |
| EPS growth | 4.5 |
Momentum
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 10.0 |
| vol acceleration | 5.5 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 5.0 |
| Price target | 5.5 |
Insider
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 2.0 |
| holder change | 6.5 |
| notable moves | 7.0 |
- ▸Heavy insider selling — $96,088,490 (1.463% of mkt cap)
Peer rank
4.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.4 |
| quality rank | 6.4 |
| growth rank | 2.7 |
- ▸Best-in-class margins
Technical
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.6 |
| support resistance | 1.6 |
| 52w position | 9.0 |
Risk (lower is worse)
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.2 |
| days to cover | 3.5 |
| volatility | 6.3 |
| put call | 10.0 |
| implied vol | 3.6 |
| beta | 10.0 |
| debt equity | 9.4 |
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.0 |
| dividend safety | 8.5 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 6 days
- ▸Dividend aristocrat: 2.0% yield
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (5)
- MOMENTUM:6.8>=5.5
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- ASYMMETRY:-1.0=NEGATIVE
- INSIDER:1.46%=EXTREME
- EARNINGS_PROXIMITY:6d<=7d
Warning (0)
none
Reward-to-Risk
-1.03
Upside
-10.0%
Downside
9.7%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 57, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.8>=5.5. Top dim: Value at 7.3; weakest: Growth at 4.0. No conviction either direction.
The strongest dimensions are Value at 7.3, Quality at 7.3, and Momentum at 6.8; the weakest are Growth at 4.0, Technical at 4.1, and Peer rank at 4.2. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of -1.03 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Quality Margins Rule Of 40
Trip ifNet margin falls below 45% for 2 consecutive quarters.
- P2Consistent Earnings Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P3Elevated Short Interest Structural Overhang
Trip ifShort interest falls below 8% of float, removing the structural overhang.
- P4Limited Near Term Upside To ResistanceTripped
Trip ifAnalyst consensus price target rises above $48, restoring more than 10% upside from the current price of $42.34.