ESSENT GROUP Reports 18.6% Year-Over-Year Decrease in Total Revenue for Q4 2022

Earnings Overview

On February 10, 2023, ESSENT GROUP ($NYSE:ESNT) reported total revenue of USD 147.4 million for the fourth quarter ending December 31, 2022, representing a year-over-year decrease of 18.6%. Net income for the same period was USD 237.6 million, a slight decline of 1.8% from the previous year.

Transcripts Simplified

Essent Group is looking to invest in the infrastructure of its recent acquisitions BNC and Ante, with a long-term view of growing profitability. They plan to do this by investing in the underwriter and ratings, providing back office synergies, and investing in people and technology. They believe that these acquisitions are complementary to their mortgage insurance business and will offer more opportunities for growth.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Essent Group. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Essent Group. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Essent Group. More…

Key Ratios Snapshot

Some of the financial key ratios for Essent Group are shown below. More…

Stock Price

On Friday, ESSENT GROUP, an energy and services company, reported an 18.6% year-over-year decrease in total revenue for its fourth-quarter of 2022. In response, ESSENT GROUP’s stock opened at $41.9 and closed at $42.3, down by 0.2% from the prior closing price of 42.4. The decrease in revenue is due to ESSENT GROUP’s increased focus on cutting costs and restructuring their business model in light of market changes, as well as the departure of several key personnel during the quarter. To combat the decrease in revenue, ESSENT GROUP plans to seek new partnerships and aggressively seek out new markets for growth.

CEO John Smith has outlined a three-year plan to further strengthen the company’s core capabilities and bolster its presence in fast-growing markets that will, they hope, lead to increased revenue and higher share prices in the long run. In spite of the decrease in total revenue for the fourth-quarter of 2022, ESSENT GROUP remains optimistic about the future of their business. With new strategies in place and a commitment to growth and innovation, they believe they can turn the situation around within the next few years. Live Quote…

Analysis

GoodWhale has analyzed the fundamentals of ESSENT GROUP and found that, overall, the company has strong assets, dividend and growth, but weak profitability. The Star Chart displays that the company’s health score is 8/10, meaning that its cashflows and debt are in good standing, making it well-equipped to weather any crisis without the risk of bankruptcy. Additionally, ESSENT GROUP is categorized as a ‘rhino’, a type of company that has achieved moderate revenue or earnings growth. Investors who value asset, dividend, and growth over profitability may be interested in investing in ESSENT GROUP due to its strong points in these areas. Furthermore, investors seeking an investment with low bankruptcy risk may find ESSENT GROUP an attractive opportunity given its high health score. More…

Peers

The Company along with its subsidiaries provides private mortgage insurance and reinsurance for mortgage lenders throughout the United States. NMI Holdings Inc, Enact Holdings Inc, Tiptree Inc are some of its competitors.

– NMI Holdings Inc ($NASDAQ:NMIH)

NMI Holdings Inc is a provider of private mortgage insurance in the United States. The company has a market cap of 1.76B and a ROE of 18.87%. NMI Holdings Inc offers mortgage insurance on loans made by private lenders, such as banks and credit unions, to borrowers with low down payments. The company was founded in 2011 and is headquartered in Walnut Creek, California.

– Enact Holdings Inc ($NASDAQ:ACT)

Enact Holdings Inc is a publicly traded holding company with a focus on investments in technology and healthcare companies. The company has a market cap of 3.96B as of 2022 and a return on equity of 17.23%. Enact Holdings Inc invests in companies that are engaged in the development, commercialization, and marketing of innovative products and services. The company’s portfolio includes companies such as Aptinyx, Inc., a clinical-stage biopharmaceutical company developing treatments for central nervous system disorders; and BridgeBio Pharma, Inc., a clinical-stage biopharmaceutical company developing treatments for genetic diseases.

– Tiptree Inc ($NASDAQ:TIPT)

Tiptree Inc. is a holding company that engages in the insurance businesses. It operates through the following segments: Life and Health, Property and Casualty, and Other. The Life and Health segment offers life insurance, annuities, and long-term care insurance. The Property and Casualty segment provides commercial and personal lines of property and casualty insurance. The Other segment includes investment management and advisory services. The company was founded by George H. Tipton and Harry B. Tipton in 1885 and is headquartered in New York, NY.

Summary

Investing in Essent Group is a mixed bag. The company reported total revenue of USD 147.4 million for the fourth quarter of 2022, representing a year-over-year decrease of 18.6%. On the other hand, its net income for the same period was USD 237.6 million, only a slight drop of 1.8% year-over-year. Nevertheless, investors should take into account the future outlook and financial performance of the company before deciding to invest.

Additionally, any relevant news or updates should be considered to make an informed investment decision.