Essent Group Q4 EPS Misses Estimates, Net Premiums Fall 13% and Book Value Rises 13%
Essent Group delivered Q4 EPS of $1.60, 8% below estimates, and revenue of $312.4M was flat year-over-year as net premiums earned fell 13% to $213M and default rates rose to 2.5%. Book value per share grew 13% to $60.31 YoY but pre-tax profit margins narrowed, triggering a 6.3% share drop.
1. Q4 Earnings Summary
Essent reported fourth-quarter earnings per share of $1.60 versus the $1.74 consensus, while generating $312.4 million in revenue, essentially flat with the prior year. The earnings miss reflected compression in underwriting margins and higher claim-related provisions.
2. Underwriting Performance
Net premiums earned declined 13% year-over-year to $213 million, driven by disciplined pricing and lower new insurance written. The default rate on the mortgage insurance portfolio rose to 2.5% from 2.29% in the prior quarter, modestly pressuring loss reserves.
3. Capital and Book Value Growth
The company increased book value per share by 13% year-over-year to $60.31 as of December 30, 2025, reflecting retained earnings and capital efficiency initiatives. Management reiterated its focus on optimizing risk-adjusted returns over volume growth.
4. Market Reaction
Following the earnings release, shares fell approximately 6.3% on investor concerns over the profit margin squeeze and underwriting trends. Analysts noted the flat revenue and underwriting headwinds as catalysts for the sell-off.