Essent Group Ltd. Fundamental Analysis (NYSE: ESNT)
Essent Group Ltd. (NYSE: ESNT) shows moderate financial fundamentals with a PE ratio of 8.73, profit margin of 49.31%, and ROE of 12.00%. The company generates $1.4B in annual revenue with weak year-over-year growth of -0.49%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 64.4/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze ESNT's fundamental strength across five key dimensions:
Efficiency Score
WeakESNT struggles to generate sufficient returns from assets.
Valuation Score
ExcellentESNT trades at attractive valuation levels.
Growth Score
WeakESNT faces weak or negative growth trends.
Financial Health Score
ModerateESNT shows balanced financial health with some risks.
Profitability Score
ModerateESNT maintains healthy but balanced margins.
Key Financial Metrics
Is ESNT Expensive or Cheap?
P/E Ratio
ESNT trades at 8.73 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, ESNT's PEG of 1.41 indicates fair valuation.
Price to Book
The market values Essent Group Ltd. at 1.03 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 6.85 times EBITDA. This is generally considered low.
How Well Does ESNT Make Money?
Net Profit Margin
For every $100 in sales, Essent Group Ltd. keeps $49.31 as profit after all expenses.
Operating Margin
Core operations generate 60.10 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $12.00 in profit for every $100 of shareholder equity.
ROA
Essent Group Ltd. generates $9.00 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Essent Group Ltd. generates strong operating cash flow of $847.68M, reflecting robust business health.
Free Cash Flow
Essent Group Ltd. generates strong free cash flow of $843.64M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $9.59 in free cash annually.
FCF Yield
ESNT converts 14.89% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
8.73
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.41
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.03
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.15
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.00
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.71
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.12
vs 25 benchmark
ROA
Return on assets percentage
0.09
vs 25 benchmark
ROCE
Return on capital employed
0.12
vs 25 benchmark
How ESNT Stacks Against Its Sector Peers
| Metric | ESNT Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 8.73 | 20.35 | Better (Cheaper) |
| ROE | 12.00% | 610.00% | Weak |
| Net Margin | 49.31% | 641.00% | Weak |
| Debt/Equity | 0.00 | 0.91 | Strong (Low Leverage) |
| Current Ratio | 0.71 | 799.65 | Weak Liquidity |
| ROA | 9.00% | -77.00% (disorted) | Weak |
ESNT outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Essent Group Ltd.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
41.48%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
79.02%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
26.03%
Industry Style: Value, Dividend, Cyclical
High Growth