# NMI Holdings Inc. (NMI) — Financial Analysis

**Exchange:** NASDAQ  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-29  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/NMI/thesis · /stocks/NMI/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: NMI
step: "04"
title: Financial Snapshot
created: 2026-05-29
---

### Step 04 — Financial Snapshot: NMI Holdings, Inc. (FY2021–FY2025)

#### Income Statement Overview

| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 | CAGR |
|--------|--------|--------|--------|--------|--------|------|
| Total Revenue ($M) | $485.1 | $523.3 | $579.0 | $651.0 | $706.4 | +9.9% |
| Net Premiums Earned ($M) | ~$447.0 | ~$477.0 | $510.8 | $564.7 | $602.2 | +7.7% |
| Net Investment Income ($M) | ~$55.0 | ~$62.0 | $68.2 | $85.3 | $102.9 | +17.0% |
| Claims/Losses ($M) | — | — | $22.6 | $31.5 | $57.6 | — |
| Underwriting Expenses ($M) | — | — | ~$107M | ~$118M | ~$120M | — |
| Net Income ($M) | $231.1 | $292.9 | $322.1 | $360.1 | $388.9 | +13.8% |
| Diluted EPS | $2.65 | $3.39 | $3.84 | $4.43 | $4.92 | +16.7% |
| Net Margin | 47.7% | 55.9% | 55.6% | 55.3% | 55.1% | — |

*Note: FY2021-FY2022 NPE and NII are estimates from XBRL gross premiums and interpolation; FY2023-FY2025 from SEC XBRL direct.*

#### Key Insurance Ratios

| Ratio | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|-------|--------|--------|--------|--------|--------|
| Loss Ratio | ~5% | ~5% | ~4.4% | 5.6% | 9.6% |
| Expense Ratio | ~25% | ~24% | ~21% | ~21.0% | 19.9% |
| Combined Ratio | ~30% | ~29% | ~25% | 26.6% | 29.5% |

**Key observations:**
- Combined ratio below 30% for the entire 5-year period — exceptional underwriting profitability
- Loss ratio rising (FY2024: 5.6% → FY2025: 9.6%) reflects credit cycle normalization from historic lows
- Expense ratio declining (FY2021: ~25% → FY2025: 19.9%) reflects operating leverage — headcount stays flat while IIF grows

#### EPS Growth Analysis

| Period | EPS | Growth |
|--------|-----|--------|
| FY2021 | $2.65 | — |
| FY2022 | $3.39 | +27.9% |
| FY2023 | $3.84 | +13.3% |
| FY2024 | $4.43 | +15.4% |
| FY2025 | $4.92 | +11.1% |

EPS has grown at a 16.7% CAGR over 4 years (FY2021-FY2025), significantly exceeding revenue growth (9.9% CAGR) due to: (1) expanding operating margins as the expense ratio declines, (2) shrinking share count via buybacks (~10% fewer shares outstanding in FY2025 vs. FY2021).

#### Balance Sheet Snapshot

| Metric | FY2022 | FY2023 | FY2024 | FY2025 |
|--------|--------|--------|--------|--------|
| Total Assets ($M) | $2,516 | $2,941 | $3,350 | $3,841 |
| Investment Securities ($M) | $2,099 | $2,371 | $2,724 | $3,137 |
| Total Liabilities ($M) | — | $1,015 | $1,133 | $1,249 |
| Shareholders' Equity ($M) | — | $1,926 | $2,217 | $2,592 |
| Book Value/Share | — | ~$23.82 | ~$28.21 | $34.58 (ex-AOCI) |
| Long-Term Debt ($M) | — | — | — | ~$418 |
| Loss Reserves ($M) | $99.8 | $124.0 | $152.1 | $196.4 |

**Balance sheet characteristics:**
- Investment-heavy: 82% of assets in fixed-income securities (typical for PMI)
- Low financial leverage: $418M LT debt against $2.6B equity = 16% debt-to-equity
- Reserves growing: $99.8M (FY2022) → $196.4M (FY2025); reflects growing IIF and normalizing defaults
- Book value compounding: ~16% CAGR in equity base driven by retained earnings

#### PMIERs Capital Position

| Year | Available Assets | Required Assets | Ratio | Excess |
|------|-----------------|----------------|-------|--------|
| FY2025 | $3.5B | $2.1B | 167% | $1.4B |
| Q1 2026 | — | — | ~165% (est.) | ~$1.35B |

The PMIERs ratio of 167% places NMI well above the regulatory minimum (100%) and above the typical industry operating target (~150%). The $1.4B excess provides significant buffer for stress scenarios.

#### Cash Flow Characteristics

| Metric | TTM | FY2025 | FY2024 | FY2023 |
|--------|-----|--------|--------|--------|
| FCF/Share | $5.46 | $5.22 | $4.76 | $3.97 |
| FCF Margin | 59.7% | 58.4% | 59.4% | 57.6% |

Free cash flow conversion is exceptional for an insurance company — premiums collected are cash in, claims are cash out, with minimal capex requirements. FCF per share exceeds EPS because non-cash depreciation and share-based comp are add-backs.

#### Profitability Benchmarks

| Metric | NMI FY2025 | Comparable Insurance Standard |
|--------|-----------|-------------------------------|
| Net Margin | 55.1% | Exceptional (most P&C insurers: 8-15%) |
| ROE | 16.2% | High (P&C insurer avg: 10-12%) |
| Combined Ratio | 29.5% | Excellent (P&C avg: 95-105%) |
| FCF Margin | 58.4% | Exceptional |

NMI's profitability profile reflects the unique economics of PMI: premiums are collected monthly, claims are episodic (not frequent), and there are no physical loss events (unlike P&C). The business is almost purely a financial function.

#### Adversarial Accounting Review

**No significant red flags identified:**
- Revenue recognition: Straightforward premium accrual, no complex arrangements
- Reserve adequacy: Loss reserves growing in line with IIF and default rates; no unusual adjustments
- Goodwill/intangibles: None material — no acquisition history
- Related-party transactions: None identified from public filings
- Earnings quality: FCF margin exceeding net margin is a positive signal; no aggressive accruals
- Short reports/investigations: None identified

**One flag of note:** Rising loss reserves ($99.8M FY2022 → $196.4M FY2025, nearly doubling) reflects credit cycle normalization, not an accounting issue. The reserve growth is consistent with rising delinquency rates and claims experience.

#### Valuation Context (May 2026)

| Metric | Value |
|--------|-------|
| Stock Price | $36.29 |
| Market Cap | $2.76B |
| P/E (TTM) | 7.38x |
| Forward P/E (FY2026E $5.23 EPS) | 6.93x |
| P/Book | 1.08x ($36.29 vs. $33.56 book/share) |
| Analyst Avg. Target | $46.14 (+27.1% upside) |
| EV/Revenue (approx.) | ~4.1x |

NMI trades at a significant discount to its EPS-implied intrinsic value (7x forward earnings for a business compounding book at 16% ROE is anomalously cheap). The discount reflects market concerns about credit cycle normalization and housing market sensitivity.

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/NMI/fundamental

## Navigation

- Overview: /stocks/NMI
- Financials (this page): /stocks/NMI/financials
- Thesis: /stocks/NMI/thesis
- Investment Memo: /stocks/NMI/memo
- Coverage universe: /stocks