Q3 Earnings Preview for Essent (NYSE:ESNT)

in EARNINGS/INVESTING IDEAS by

Essent Group Ltd. (NYSE:ESNT) is scheduled to report Q3 earnings results before markets open for trading on November 6, 2020.

The company is expected to report earnings of $0.93/share on revenue of $239.7 million. The consensus earnings per share (EPS) of $0.93/share is based on a poll of 10 analysts and represents a decline in eps of −36.6% over the same quarter last year, when the company reported earnings of $1.47/share.

The revenue forecast of $239.7 million based on a poll of 8 analysts implies a year-over-year (YoY) growth in revenue of 5.9%. Last year the company reported $226.4 million in revenue for the quarter.

Expected to report EPS contraction of −36.6% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $239.69 $226.39 5.9%
EPS $0.93 $1.47 −36.6%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarters.

What are your expectations from Essent Group Ltd. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.39 $0.15 −62.0% Missed
Q1, 2020 $1.37 $1.52 10.9% Beat
Q4, 2019 $1.43 $1.49 4.6% Beat
Q3, 2019 $1.38 $1.47 6.7% Beat
Q2, 2019 $1.31 $1.39 6.3% Beat
Q1, 2019 $1.26 $1.30 3.5% Beat
Q4, 2018 $1.19 $1.31 10.5% Beat
Q3, 2018 $1.14 $1.18 3.7% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 7, 2020 $36.09 $35.82 −0.7% Decline
May 8, 2020 $28.96 $27.87 −3.8% Decline
February 14, 2020 $52.02 $48.93 −5.9% Decline
November 8, 2019 $52.65 $53.67 1.9% Increase

Fundamentals And Technical Analysis

Essent Group Ltd. is currently trading at $39.85/share, up 0.8% for the day. The company is trading at approximately 71.4% of its 52-week high of $55.84/share. The company’s stock price is up 11.3% since the last earnings report and down −8.5% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 48.41 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:ESNT Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 9.81 and a forward P/E multiple of 11.53.

Essent Group Ltd.’s current share price also implies a price-to-book (P/B) multiple of 1.24. The following table summarizes some other key fundamental ratios:

Data as of November 1, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $39.85
P/E Ratio 9.8x
P/E Ratio (Fwd) 11.5x
PEG Ratio −0.9
Total Debt / Total Capital 8.9%
Levered Free Cash Flow $667.6 million
EV / EBITDA 2.8x

Finbox

Essent Group Ltd. is a mid-cap stock with a market capitalization of $4.48 billion and a total enterprise value of $4.843 billion. The company operates in the Financials sector and the Thrifts & Mortgage Finance industry.

Essent Group Ltd., through its subsidiaries, provides private mortgage insurance and reinsurance for mortgages secured by residential properties located in the United States. Its mortgage insurance products include primary, pool, and master policy. The company also provides information technology maintenance and development services; customer support-related services; and contract underwriting services. It serves the originators of residential mortgage loans, such as regulated depository institutions, mortgage banks, credit unions, and other lenders. The company was founded in 2008 and is based in Hamilton, Bermuda.

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