NYSE:ESNT, an undervalued stock with good fundamentals.

Last update: Nov 5, 2024

ESSENT GROUP LTD (NYSE:ESNT) is a hidden gem identified by our stock screening tool, featuring undervaluation and robust fundamentals. NYSE:ESNT showcases decent financial health and profitability, coupled with an attractive price. Let's dig deeper into the analysis.

Valuation Analysis for NYSE:ESNT

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:ESNT was assigned a score of 9 for valuation:

ESNT is valuated cheaply with a Price/Earnings ratio of 7.84.
ESNT's Price/Earnings ratio is rather cheap when compared to the industry. ESNT is cheaper than 83.00% of the companies in the same industry.
When comparing the Price/Earnings ratio of ESNT to the average of the S&P500 Index (30.20), we can say ESNT is valued rather cheaply.
A Price/Forward Earnings ratio of 7.45 indicates a rather cheap valuation of ESNT.
81.00% of the companies in the same industry are more expensive than ESNT, based on the Price/Forward Earnings ratio.
ESNT's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 23.28.
89.00% of the companies in the same industry are more expensive than ESNT, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, ESNT is valued cheaply inside the industry as 84.00% of the companies are valued more expensively.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ESNT has a very decent profitability rating, which may justify a higher PE ratio.

Exploring NYSE:ESNT's Profitability

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:ESNT was assigned a score of 7 for profitability:

ESNT's Return On Assets of 11.04% is amongst the best of the industry. ESNT outperforms 92.00% of its industry peers.
The Return On Equity of ESNT (13.73%) is better than 64.00% of its industry peers.
With an excellent Return On Invested Capital value of 11.52%, ESNT belongs to the best of the industry, outperforming 87.00% of the companies in the same industry.
ESNT had an Average Return On Invested Capital over the past 3 years of 13.02%. This is significantly above the industry average of 7.34%.
ESNT has a better Profit Margin (61.32%) than 96.00% of its industry peers.
Looking at the Operating Margin, with a value of 74.46%, ESNT belongs to the top of the industry, outperforming 94.00% of the companies in the same industry.

Unpacking NYSE:ESNT's Health Rating

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:ESNT has earned a 9 out of 10:

An Altman-Z score of 4.24 indicates that ESNT is not in any danger for bankruptcy at the moment.
The Altman-Z score of ESNT (4.24) is better than 89.00% of its industry peers.
ESNT has a debt to FCF ratio of 0.52. This is a very positive value and a sign of high solvency as it would only need 0.52 years to pay back of all of its debts.
The Debt to FCF ratio of ESNT (0.52) is better than 86.00% 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.
The Debt to Equity ratio of ESNT (0.08) is better than 83.00% of its industry peers.
A Current Ratio of 4.01 indicates that ESNT has no problem at all paying its short term obligations.
With an excellent Current ratio value of 4.01, ESNT belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
ESNT has a Quick Ratio of 4.01. This indicates that ESNT is financially healthy and has no problem in meeting its short term obligations.
ESNT has a better Quick ratio (4.01) than 91.00% of its industry peers.

Growth Assessment of NYSE:ESNT

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:ESNT has achieved a 5 out of 10:

The Earnings Per Share has grown by an nice 10.75% over the past year.
ESNT shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 17.53%.
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.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of ESNT

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.