NMI Holdings Inc. Common Stock (NMIH)

FairStock Score: 83/100 — HIGH CONVICTION

Key Financials

Strengths

• Generates $267 million in annual free cash flow (8.6% yield on market cap)
• Solid return on equity of 16.2% above cost of capital
• Conservative balance sheet with debt-to-equity of just 0.16, providing financial flexibility
• Healthy net profit margin of 13.3% showing consistent profitability
• FairStock composite score of 83/100 places it in the top tier across value, quality, and momentum factors

AI Analysis

NMI Holdings Inc. Common Stock is a small-cap financial services company valued at $3.1 billion. The business generates $706 million in annual revenue with a 13.3% net margin and $267 million in free cash flow. From a quality standpoint, NMI shows Altman Z-Score of 2.3 in the grey zone and adequate 16% ROE. On valuation, the stock is deeply undervalued on a P/E basis at 8.4x, with offers a 34% margin of safety vs Graham Number of $61. Growth dynamics show revenue growing at 8.6% and profit growth of 9.3%. Our composite FairStock Score of 83/100 reflects strong fundamentals overall. This combination of reasonable valuation, solid returns, and conservative leverage makes it worth a closer look for value-oriented portfolios.

Bull Case

The market underappreciates NMI's consistent 16% ROE at just 8x earnings—a re-rating toward sector peers could unlock 30-50% upside. With $267 million in annual free cash flow (8.6% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the financial services space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer