Abstract
Essent Group will report fourth-quarter results on February 13, 2026 Pre-Market; this preview summarizes last quarter’s performance and compiles current-quarter forecasts for revenue, margin, net income and adjusted EPS alongside prevailing institutional views.Market Forecast
Consensus compiled from the company’s forecast field points to fourth-quarter revenue of $312.62 million, with an estimated adjusted EPS of $1.73 and EBIT of $245.80 million; year-over-year, revenue is projected to edge down by 0.40% while adjusted EPS is seen up by 4.81%. Forecast margin details are limited, but the company’s last reported gross profit margin of 77.77% and net profit margin of 52.66% set a high bar; the street looks for stable underwriting profitability and disciplined loss ratios to keep margins resilient this quarter. Essent’s core business remains mortgage insurance, with net premiums as the main driver; investors are focused on premium persistency and new insurance written trends as the primary highlight. The most promising contribution continues to come from investment income as rates stay elevated, with net investment-related revenue last quarter totaling $59.80 million; YoY commentary is not provided in the dataset.Last Quarter Review
Essent Group’s most recent quarter delivered revenue of $311.83 million, a gross profit margin of 77.77%, GAAP net income attributable to common shareholders of $164.00 million, a net profit margin of 52.66%, and adjusted EPS of $1.67; year-over-year, revenue declined by 1.50% while adjusted EPS grew by 1.21%. A key highlight was strong operating leverage that supported high margins despite top-line pressure, reflecting favorable credit trends and prudent expense control. By segment, the main business mix was led by net premiums of $246.33 million, with net investment revenue contributing $59.80 million; YoY changes were not provided in the tool’s dataset.Current Quarter Outlook (with major analytical insights)
Mortgage Insurance Core: Premium dynamics and credit performance
Essent’s principal earnings engine is mortgage insurance, where net premiums last quarter were $246.33 million and accounted for the majority of revenue. For the current quarter, the revenue estimate of $312.62 million implies steady premium contributions when combined with investment income and other items. The slight expected YoY revenue contraction of 0.40% suggests normalizing new insurance written volumes and persistency balancing growth, while management discipline on pricing and risk selection supports underwriting profitability. Investors will focus on any shift in new insurance written, cancellations, and delinquency trends as current home affordability constraints and seasoned vintages influence the in-force book.Gross margin of 77.77% last quarter provides a favorable baseline, driven by historically low claim activity and a benign loss environment, although loss ratios can move with macro conditions. The net margin of 52.66% underscores the capital-light characteristics of mortgage insurance when credit costs are contained, but any uptick in early-stage delinquencies from softer labor markets could pressure margins. The key swing factor is loss development: if cure rates remain solid and reserves prove adequate, margins can remain firm even with flat to slightly lower revenue.
Investment Income: Rate tailwinds and portfolio positioning
Net investment-related revenue of $59.80 million last quarter reflected the supportive interest rate backdrop and higher reinvestment yields on fixed-income portfolios. The forecast EBIT of $245.80 million alongside EPS of $1.73 presumes that investment income continues to contribute meaningfully, offsetting mild premium softness. Portfolio duration and credit quality choices will influence income stability; with benchmark rates still comparatively elevated, reinvestments should continue to add incremental yield, though mark-to-market volatility is a watchpoint if spreads widen.The sensitivity of investment income to short- and intermediate-term yields is a positive in a stable-to-higher rate environment. Should the yield curve steepen modestly, carry could improve further, cushioning any underwriting variability. Conversely, a quicker-than-expected decline in rates would gradually compress reinvestment yields and slow the pace of investment income growth, which would place more burden on underwriting to sustain EPS momentum.
Stock Price Drivers: Credit trends, capital returns, and guidance cadence
This quarter’s share reaction is likely to hinge on disclosed credit metrics—new delinquencies, cures, and any changes to loss ratios or reserve assumptions. Given the elevated margin base, even small changes in loss provisioning can swing net income. In parallel, investors will watch for capital deployment updates, including share repurchases and potential dividend changes, as Essent’s capital position and cash generation typically allow for consistent returns when credit is stable.Guidance or qualitative commentary on housing market dynamics, affordability, and refinance activity will also be important. If management signals resilient demand for mortgage credit and healthy borrower performance, the market could look past slight revenue contraction and focus on margin durability and EPS growth. Conversely, any sign of rising early-stage delinquencies linked to macro softening could lead to cautious sentiment even if headline EPS meets estimates.