A Look At Essent Group (ESNT) Valuation After Recent Share Price Weakness

Essent Group (ESNT) has recently drawn investor attention after a period of mixed share performance, with a 1 day decline of 2.1% and a 7 day decline of 2.3%, alongside a positive month return.

See our latest analysis for Essent Group.

Looking past the recent 1 day and 7 day share price weakness, Essent Group’s 90 day share price return of 7.63% sits alongside a 1 year total shareholder return of 20.91% and a 3 year total shareholder return of 74.73%. This suggests earlier momentum that now appears to be cooling.

If Essent’s profile has you reassessing financial names, this is a useful moment to broaden your search and check out fast growing stocks with high insider ownership.

With Essent Group trading at $64.16 against an analyst price target of $68.38 and an estimated intrinsic discount of about 53%, you have to ask: is the stock still undervalued, or is the market already pricing in future growth?

Most Popular Narrative: 4.9% Undervalued

With Essent Group closing at $64.16 against a narrative fair value of $67.50, the most followed view still sees a modest valuation gap worth unpacking.

The analysts have a consensus price target of $66.25 for Essent Group based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $70.0, and the most bearish reporting a price target of just $59.0.

Read the complete narrative.

Curious how modest revenue growth, gently easing margins and a future P/E below the wider industry are all woven into one valuation story? The full narrative sets out the earnings path, the assumed share count change and the discount rate that ties it back to today, while keeping one key tension between growth and multiple compression at the center of the fair value call.

Result: Fair Value of $67.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this depends on housing remaining supportive and Essent keeping pace with new credit models, because weaker homebuyer demand or disruptive fintech underwriting could quickly challenge the thesis.

Find out about the key risks to this Essent Group narrative.

Build Your Own Essent Group Narrative

If you see the numbers differently or want to stress test your own assumptions in a few quick steps, you can build a custom view with Do it your way.

A great starting point for your Essent Group research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If Essent Group has sharpened your thinking, do not stop here. Use this momentum to line up your next round of potential opportunities.

• Target under-the-radar opportunities by scanning these 876 undervalued stocks based on cash flows that align with your preferred balance of quality and price.
• Explore long term themes in digital assets by checking out these 79 cryptocurrency and blockchain stocks shaping payments, infrastructure and blockchain services.
• Focus on income potential by reviewing these 11 dividend stocks with yields > 3% that meet your yield and payout preferences.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com