When you look at NYSE:ESNT, it's hard to ignore the strong fundamentals, especially considering its likely undervaluation.

Last update: Jul 1, 2024

Our stock screening tool has pinpointed ESSENT GROUP LTD (NYSE:ESNT) as an undervalued stock. NYSE:ESNT maintains a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

Looking at the Valuation

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NYSE:ESNT, the assigned 8 reflects its valuation:

A Price/Earnings ratio of 8.50 indicates a reasonable valuation of ESNT.
Based on the Price/Earnings ratio, ESNT is valued cheaply inside the industry as 80.39% of the companies are valued more expensively.
ESNT is valuated cheaply when we compare the Price/Earnings ratio to 28.36, which is the current average of the S&P500 Index.
ESNT is valuated cheaply with a Price/Forward Earnings ratio of 7.80.
ESNT's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. ESNT is cheaper than 76.47% of the companies in the same industry.
ESNT is valuated cheaply when we compare the Price/Forward Earnings ratio to 20.16, which is the current average of the S&P500 Index.
Based on the Enterprise Value to EBITDA ratio, ESNT is valued cheaper than 86.27% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ESNT is valued cheaply inside the industry as 81.37% of the companies are valued more expensively.
ESNT has a very decent profitability rating, which may justify a higher PE ratio.

How do we evaluate the Profitability for NYSE:ESNT?

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:ESNT has achieved a 7:

The Return On Assets of ESNT (10.77%) is better than 93.14% of its industry peers.
With a decent Return On Equity value of 13.53%, ESNT is doing good in the industry, outperforming 62.75% of the companies in the same industry.
The Return On Invested Capital of ESNT (11.39%) is better than 87.25% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ESNT is significantly above the industry average of 7.18%.
Looking at the Profit Margin, with a value of 61.41%, ESNT belongs to the top of the industry, outperforming 96.08% of the companies in the same industry.
ESNT's Operating Margin of 75.24% is amongst the best of the industry. ESNT outperforms 93.14% of its industry peers.

What does the Health looks like for NYSE:ESNT

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:ESNT was assigned a score of 9 for health:

ESNT has an Altman-Z score of 4.26. This indicates that ESNT is financially healthy and has little risk of bankruptcy at the moment.
ESNT has a better Altman-Z score (4.26) than 89.22% of its industry peers.
ESNT has a debt to FCF ratio of 0.54. This is a very positive value and a sign of high solvency as it would only need 0.54 years to pay back of all of its debts.
ESNT has a Debt to FCF ratio of 0.54. This is amongst the best in the industry. ESNT outperforms 85.29% of its industry peers.
ESNT has a Debt/Equity ratio of 0.08. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.08, ESNT is doing good in the industry, outperforming 77.45% of the companies in the same industry.
ESNT has a Current Ratio of 3.18. This indicates that ESNT is financially healthy and has no problem in meeting its short term obligations.
ESNT's Current ratio of 3.18 is amongst the best of the industry. ESNT outperforms 84.31% of its industry peers.
A Quick Ratio of 3.18 indicates that ESNT has no problem at all paying its short term obligations.
The Quick ratio of ESNT (3.18) is better than 85.29% of its industry peers.

Growth Insights: NYSE:ESNT

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:ESNT, the assigned 5 reflects its growth potential:

Looking at the last year, ESNT shows a quite strong growth in Revenue. The Revenue has grown by 16.07% in the last year.
Measured over the past years, ESNT shows a quite strong growth in Revenue. The Revenue has been growing by 9.06% on average per year.
Based on estimates for the next years, ESNT will show a quite strong growth in Revenue. The Revenue will grow by 8.76% on average per year.

More Decent Value stocks can be found in our Decent Value screener.

Check the latest full fundamental report of ESNT for a complete fundamental analysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.