Value
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.3 |
| P/S | 7.2 |
| EV/EBITDA | 7.8 |
| Fwd P/E | 9.6 |
| PEG | 7.1 |
| Analyst target | 4.0 |
- ▸Forward P/E: 8.0x
- ▸PEG: 0.99
- ▸Attractively valued
NMIH · Why this verdict
Why NMI Holdings (NMIH) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
NMI Holdings combines a maximum Piotroski F-Score of 9 out of 9, 54% net margins, and a wide economic moat in specialty mortgage insurance with an attractive forward P/E of 6.9x, though a death-cross technical pattern and slim current risk-reward margin call for patience before entry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
NMI Holdings achieved a perfect Piotroski F-Score of 9 out of 9 alongside 54% net margins and a wide economic moat designation, indicating a high-quality compounder with strong recurring returns in the private mortgage insurance market. Quality breakdown | Net margins remain above 50% and the Piotroski F-Score stays at 8 or higher over the next 12 months, confirming the quality of the business is durable. | →Stable |
| CounterPrivate mortgage insurance is cyclical and highly sensitive to housing market downturns, and NMI's regulatory concentration with the Wisconsin OCI creates single-regulator risk. | ||
A forward P/E of 6.9x and PEG ratio of 0.69 indicate that NMI Holdings is trading at a significant discount relative to its earnings growth rate, suggesting the market has not yet priced in the quality of the business. Valuation breakdown | The forward P/E expands above 9x within 12 months as the market re-rates the stock toward fair value relative to its growth rate. | ↓Deteriorating |
| CounterLow multiples in specialty financial companies often reflect regulatory capital constraints and the cyclical risk that mortgage insurance claims could spike in a housing downturn. | ||
NMI has beaten or matched earnings estimates in 3 of the last 4 quarters with consistently small positive surprises, reflecting predictable underwriting performance in its mortgage insurance book. Earnings | Earnings beats or inline results continue in at least 3 of the next 4 quarters with EPS surprise above 0%. | →Stable |
| CounterEPS surprises are modest at roughly 1 to 2% above estimates, suggesting there is limited potential for re-rating from earnings upside alone. | ||
The risk-reward at the current price of $37.24 narrowly failed the minimum threshold of 1.5 times, with an actual ratio of 1.37 times, meaning the stock needs a small pullback to the $36.49 entry target to offer sufficient asymmetry for a new position. Targets | Price pulls back to below $36.50 within 4 weeks, creating a 10% upside with only 4% downside risk for a cleaner entry. | Tripped↓Deteriorating |
| CounterThe stock is recovering from a shallow death cross that has already been exempted by strong quality and momentum metrics, suggesting the near-miss may not resolve downward. | ||
NMI Holdings achieved a perfect Piotroski F-Score of 9 out of 9 alongside 54% net margins and a wide economic moat designation, indicating a high-quality compounder with strong recurring returns in the private mortgage insurance market.
→StableQuality breakdown
- Expectation
- Net margins remain above 50% and the Piotroski F-Score stays at 8 or higher over the next 12 months, confirming the quality of the business is durable.
CounterPrivate mortgage insurance is cyclical and highly sensitive to housing market downturns, and NMI's regulatory concentration with the Wisconsin OCI creates single-regulator risk.
A forward P/E of 6.9x and PEG ratio of 0.69 indicate that NMI Holdings is trading at a significant discount relative to its earnings growth rate, suggesting the market has not yet priced in the quality of the business.
↓DeterioratingValuation breakdown
- Expectation
- The forward P/E expands above 9x within 12 months as the market re-rates the stock toward fair value relative to its growth rate.
CounterLow multiples in specialty financial companies often reflect regulatory capital constraints and the cyclical risk that mortgage insurance claims could spike in a housing downturn.
NMI has beaten or matched earnings estimates in 3 of the last 4 quarters with consistently small positive surprises, reflecting predictable underwriting performance in its mortgage insurance book.
→StableEarnings
- Expectation
- Earnings beats or inline results continue in at least 3 of the next 4 quarters with EPS surprise above 0%.
CounterEPS surprises are modest at roughly 1 to 2% above estimates, suggesting there is limited potential for re-rating from earnings upside alone.
The risk-reward at the current price of $37.24 narrowly failed the minimum threshold of 1.5 times, with an actual ratio of 1.37 times, meaning the stock needs a small pullback to the $36.49 entry target to offer sufficient asymmetry for a new position.
Tripped↓DeterioratingTargets
- Expectation
- Price pulls back to below $36.50 within 4 weeks, creating a 10% upside with only 4% downside risk for a cleaner entry.
CounterThe stock is recovering from a shallow death cross that has already been exempted by strong quality and momentum metrics, suggesting the near-miss may not resolve downward.
Per-dimension breakdown
Quality
8.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.2 |
| ROA | 5.9 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 6.4 |
| FCF quality | 6.1 |
| Moat | 7.8 |
| Rule of 40 | 8.2 |
| Piotroski F | 10.0 |
- ▸Strong margins: 54%
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
- ▸Rule of 40: 50 (pass)
Growth
3.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.0 |
| EPS growth | 3.6 |
Momentum
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 7.5 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 1.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.6 |
| Price target | 6.0 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (6.0) — signal dampened
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Negligible insider selling — $58,897 (0.002% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.2 |
| quality rank | 7.6 |
| growth rank | 4.2 |
- ▸Attractive P/E vs peers
Technical
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.3 |
| 52w position | 10.0 |
Risk (lower is worse)
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.3 |
| days to cover | 7.6 |
| volatility | 7.0 |
| put call | 6.7 |
| implied vol | 4.0 |
| beta | 9.8 |
| debt equity | 9.4 |
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 3.4 |
- ▸Strong earnings: 3B/0M
- ▸Earnings in 2 days
How the verdict was assembled
Engine trigger
Downgraded from BUY WAIT — price $43.95 has reached target $43.17. No upside to wait for.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|SANITY:WAIT+price>=TPPassed (6)
- MOMENTUM:6.5>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.8=NEGATIVE
- EARNINGS_PROXIMITY:2d<=7d
Warning (0)
none
Reward-to-Risk
-0.82
Upside
-7.0%
Downside
8.5%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 70, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.3B<$5B
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Downgraded from BUY WAIT — price $43.95 has reached target $43.17. No upside to wait for. The 10-dimension scores remain Quality at 8.0 (strongest), but ASYMMETRY:-0.8=NEGATIVE also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Quality at 8.0, Risk (lower is worse) at 7.5, and Value at 7.4; the weakest are Technical at 3.4, Growth at 3.8, and Peer rank at 5.7. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.82 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Business Quality
Trip ifNet margin falls below 45% for 2 consecutive quarters due to rising insurance claims.
- P2Attractive Forward Valuation
Trip ifForward P/E contracts below 5x without a corresponding earnings estimate increase, suggesting multiple compression.
- P3Consistent Earnings Delivery
Trip ifEarnings surprise falls below 0% in at least 2 of the next 4 quarters.
- P4Risk Reward Gate Near MissTripped
Trip ifPrice rises above $40 before the risk-reward ratio reaches 1.5 times, increasing position risk.