Mortgage insurance provider Essent Group (NYSE: ESNT) fell short of the markets revenue expectations in Q3 CY2025, with sales falling 1.5% year on year to $311.8 million. Its GAAP profit of $1.67 per share was 5.3% below analysts’ consensus estimates.
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Essent Group (ESNT) Q3 CY2025 Highlights:
“We are pleased with our third quarter results, which again demonstrate the strength and resilience of our business model,” said Mark A. Casale, Chairman and Chief Executive Officer.
Company Overview
Serving as a crucial bridge between homebuyers and the American dream of homeownership, Essent Group (NYSE: ESNT) provides private mortgage insurance and title services that enable lenders to offer home loans with down payments of less than 20%.
Revenue Growth
Insurance companies generate revenue three ways. The first is the core insurance business itself, represented in the income statement as premiums earned. The second source is investment income from investing the “float” (premiums collected but not yet paid out as claims) in assets such as fixed-income assets and equities. The third is fees from policy administration, annuities, and other value-added services. Regrettably, Essent Group’s revenue grew at a mediocre 6.2% compounded annual growth rate over the last five years. This fell short of our benchmark for the insurance sector and is a poor baseline for our analysis.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Essent Group’s annualized revenue growth of 10.1% over the last two years is above its five-year trend, suggesting its demand recently accelerated. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Essent Group missed Wall Street’s estimates and reported a rather uninspiring 1.5% year-on-year revenue decline, generating $311.8 million of revenue.
Net premiums earned made up 82.2% of the company’s total revenue during the last five years, meaning Essent Group barely relies on non-insurance activities to drive its overall growth.
Net premiums earned commands greater market attention due to its reliability and consistency, whereas investment and fee income are often seen as more volatile revenue streams that fluctuate with market conditions.
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Book Value Per Share (BVPS)
Insurance companies are balance sheet businesses, collecting premiums upfront and paying out claims over time. The float–premiums collected but not yet paid out–are invested, creating an asset base supported by a liability structure. Book value per share (BVPS) captures this dynamic by measuring these assets (investment portfolio, cash, reinsurance recoverables) less liabilities (claim reserves, debt, future policy benefits). BVPS is essentially the residual value for shareholders.
We therefore consider BVPS very important to track for insurers and a metric that sheds light on business quality. While other (and more commonly known) per-share metrics like EPS can sometimes be lumpy due to reserve releases or one-time items and can be managed or skewed while still following accounting rules, BVPS reflects long-term capital growth and is harder to manipulate.
Essent Group’s BVPS grew at an excellent 12% annual clip over the last five years. BVPS growth has also accelerated recently, growing by 14.4% annually over the last two years from $44.98 to $58.86 per share.
Key Takeaways from Essent Group’s Q3 Results
We struggled to find many positives in these results. Its EPS missed and its revenue fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $61.25 immediately after reporting.
Is Essent Group an attractive investment opportunity right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
