Since April 2026, Essent Group has been in a holding pattern, posting a small return of 1.8% while floating around $62.01. The stock also fell short of the S&P 500’s 12% gain during that period.
Is now the time to buy Essent Group, or should you be careful about including it in your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Is Essent Group Not Exciting?
We’re sitting this one out for now. Here are three reasons you should be careful with ESNT, plus one stock we’d rather own.
1. Net Premiums Earned Point to Soft Demand
Insurers sell policies then use reinsurance (insurance for insurance companies) to protect themselves from large losses. Net premiums earned are therefore what's collected from selling policies less what’s paid to reinsurers as a risk mitigation tool.
Essent Group’s net premiums earned has grown at a 1.8% annualized rate over the last two years, much worse than the broader insurance industry and slower than its total revenue.
2. EPS Barely Growing
Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions.
Essent Group’s unimpressive 8.2% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
Final Judgment
Essent Group’s business quality ultimately falls short of our standards. With its shares underperforming the market lately, the stock trades at 0.9× forward P/B (or $62.01 per share). This valuation is reasonable, but the company’s shakier fundamentals present too much downside risk. We’re fairly confident there are better investments elsewhere. We’d recommend looking at our favorite semiconductor picks and shovels play.
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