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Is It Time To Consider Buying NMI Holdings, Inc. (NASDAQ:NMIH)?

Simply Wall St

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NMI Holdings, Inc. (NASDAQ:NMIH), operating in the financial services industry based in United States, saw a decent share price growth in the teens level on the NASDAQGM over the last few months. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine NMI Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for NMI Holdings

Is NMI Holdings still cheap?

Great news for investors – NMI Holdings is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $47.1, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, NMI Holdings’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of NMI Holdings look like?

NasdaqGM:NMIH Past and Future Earnings, June 10th 2019

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 80% over the next couple of years, the future seems bright for NMI Holdings. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? Since NMIH is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on NMIH for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy NMIH. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on NMI Holdings. You can find everything you need to know about NMI Holdings in the latest infographic research report. If you are no longer interested in NMI Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.