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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Nmi Holdings, Inc. (XNAS:NMIH) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
NMIH
Name:
NMI HOLDINGS, INC. (XNAS:NMIH)
Sector:
78.34M
Industry:
Insurance�Specialty
CEO:
Ms. Claudia Merkle
Total Employees:
246
Our Technological Advancement Rating
Our Rating:
-
-
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF NMI HOLDINGS, INC.(NMIH) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND INSURANCE�SPECIALTY INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
20.2
One Month Price Target:
$20.36
Six Month Price Target :
$21.18
Likely Price in One Year's Time:
Ticker:
$22.15
Likely Trading Range Today Under (Normal Volatility)
$20.08
Price Upper limit ($) :
$20.32
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$18.71
This week:
$16.88
This month :
$13.56
Other Primary facts
Market Cap:
1.66B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
84.70M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
17.4%
-23.61%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$27.10
$23.97
$13.30
$16.43
Medium risk (<10%) entry points
Buy Call
Sell Call
$22.95
Buy Put:
Sell Put:
$22.28
$17.44
$18.12
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
NMIH
Sharpe Ratio:
-0.52%
Comparison:
NMIH, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -345.65% lower than the industry
& is -122.95% lower than the market/S&P 500 average
Average Returns/Yield of
NMIH
Daily returns:
-0.01%
Weekly returns:
-0.05%
Monthly returns:
-0.20%
Yearly returns:
3.76%
Comparison of returns:
Average annual returns/yield (last 3 years) is -162.84% below industry average
Classification:
NMIH, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.63
Statistical test of Returns:
NMIH has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.58%
Weekly Volatility:
7.99%
Monthly Volatility:
15.99%
Yearly Volatility:
55.39%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.07%
Volatility in last five trading days has been -69.97% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.35%
Weekly VaR:
-16.44%
Monthly VaR:
-32.88%
How Much Can the price of
NMIH
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-29%
Worst case (decline):
>85%
This translates to price declining to:
$14.30
This translates to price declining to:
$3.03
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
NMIH is a 132.08% riskier investment compared to the market/S&P 500 & is 98.83% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 30.54% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
NMIH
Beta in relation to market/S&P 500--1.44
Expected beta in 1 year's time:
0.99
Expected beta in 3 year's time:
1.401
Unlevered (debt free) Beta:
1.2
Beta in relation to Nasdaq (XNAS):
0.944
Beta in relation to all global stocks::
0.91
Beta Comparison & Analysis
Beta of competitors/peers::
1.108
Beta is 29.98% higher than peers
Average Industry Beta:
1.047
Beta is 37.55% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
15.29%
Sustainable growth rate is -7.00% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.154
Alpha is 134.48% above industry average alpha yield
Alpha is -979% below the market average
Analysis of Cost of Capital of
NMIH
Equity cost of capital:
0.130
Equity cost of capital is 26.09% above industry mean WACC
Unlevered (without debt) cost of capital:
10.84%
Before-tax cost of debt:
8.08%
After-tax cost of debt:
6.38%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
6.38%
WACC is 11.80% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$5.88
Revenue growth rate per share of (3Y):
1.11
Annual revenue growth rate is 4.57% above the industry average
EPS:
$2.82
Expected Annual growth rate of EPS (3Y):
1.55%
Expected future EPS growth rate is -79.51% lower than the Insurance�Specialty industry
Free cash flow (FCF) per share:
$3.54
-
-
Debt per share
$4.66
EBITDA per share
$4.25
Valuation Analysis Today of
NMIH
P/E Ratio:
6.66
P/E Ratio of Competitors/Peers:
11.61
P/E ratio is -42.63% lower than main peers & is -5.25% lower than the industry
Stock price/value with industry average P/E ratio: $19.82
NMIH is 1.93% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
3.43
Price to sales ratio is 23.62% above the industry mean
P/B (Price to book value ratio):
1.11
Price to free cash flow: 5.71
Price to free cash flow ratio is -34.45% lower than the industry
Net income growth rate (3Y):
62.43%
Net income growth rate is -52.20% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
25.73%
Net debt to equity ratio:
17.40%
Debt to assets ratio:
16.29%
Net debt to assets ratio:
11.02%
Debt-to-asset ratio is -52.93% below industry average
Ability to repay debt:
Interest coverage ratio:
11.26
Interest coverage ratio is 217.63% more than industry average
Looking forward:
Debt growth rate:
0.34%
Annual debt growth is -109% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.597
Statistical significance of correlation:
NMIH has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.587
Stock price is 1.72% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.587
Correlation of price movement with Nasdaq (^IXIC):
0.053
Covariance of price movement with the market:
0.11
Kurtosis
5.598
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.373
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
NMIH
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
59.56%
Operating profit margin is 88.35% higher than the industry
Net Profit Margin Ratio:
-
Effective Tax Rate:
22.18%
Effective tax rate is 1.74% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
16.02%
Return on equity (ROE) is -25.56% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
10.15%
Return on assets (ROA) is 60.42% higher than the industry
Financial Leverage:
1.2x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 3.8 years
Stock based compensation to net income ratio:
1.71%
In-depth Efficiency Analysis
Revenue generated per employee:
2.0M
Each employee generates 98% more revenue than industry average revenue per employee
EBITDA generated per employee:
1.5M
Each employee generates 162% more EBITDA than industry average revenue per employee
Profit generated per employee:
999.7K
Each employee generates 159% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
318.4K
Each employee generates 197% more free cash flow than industry average revenue per employee
Assets/Capital per employee
0.0K
Each employee generates 197% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
NMIH
VERITEX HOLDINGS, INC. (XNAS:VBTX)
EAGLE BANCORP, INC. (XNAS:EGBN)
LAKELAND FINANCIAL CORPORATION (XNAS:LKFN)
PSACU
HOPE BANCORP, INC. (XNAS:HOPE)
TRUSTMARK CORPORATION (XNAS:TRMK)
VIRTUS INVESTMENT PARTNERS, INC. (XNAS:VRTS)
ENTERPRISE FINANCIAL SERVICES CORP (XNAS:EFSC)
Pathward Financial, Inc. (XNAS:CASH)
Current Analyst Ratings
Strong buy�17%
Buy�8%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
498.18M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
-
-
-
-
-
-
-
-
31.92M
11.65M
359.59M
296.73M
245.92M
316.02M
70.10M
245.92M
Statement of Cash Flow
Date:
Period:
3.09M
Differed Income Tax :
19.05M
Stock Based Compensation :
4.20M
Change in Working Capital :
- 15370.00K
Accounts Receivables:
72.00K
Other Working Capital:
79.00K
Other Non-Cash Items:
1.66M
Net Cash Provided by Operating Activities:
80.31M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 66515.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
127.85M
1.99B
2.12B
80.61M
-
-
-
-
-
36.02M
1.99B
-
-
-
2.42B
2.42B
-
-
-
-
-
-
394.97M
-
551.94M
1.44B
888.90M
863.00K
675.82M
- 97309.0K
955.67M
March 31, 2022 at 6:00:00 AM
182.17M
1.54B
2.42B
3.99B
394.97M
267.1M
47.12M
- 1974.00K
- 21370.00K
-
-
- 5000.00K
-
320.00K
- 4680.00K
-
54.26M
130.91M
76.65M
80.31M
- 1974.00K
78.34M
Our Proprietary Portfolio Rating
Our Rating:
-
Price Forecast/Expected Price in Next 5 Years of
NMIH
2023
2024
2025
2026
2027
$26.92
$29.53
$32.38
$35.52
$38.95