Essent Group’s first quarter results were met with a positive market reaction, as management pointed to strong portfolio persistency and higher investment yields as key factors supporting earnings. CEO Mark Casale explained that “higher interest rates continue to benefit the persistency of our insured portfolio and investment yields,” which helped offset muted growth in new mortgage insurance originations due to affordability challenges and limited housing supply. Despite these external pressures, management highlighted the continued high credit quality of new business and stable unit economics, supported by disciplined underwriting and a focus on operating efficiency.

Is now the time to buy ESNT? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Essent Group’s Q1 Earnings Call

• Rick Shane (JPMorgan) asked if housing affordability is reaching a turning point for first-time buyers, and how Essent adjusts for regional differences. CEO Mark Casale replied that while affordability remains challenging, Essent is positioned to benefit when demand returns and noted price adjustments in select markets.
• Terry Ma (Barclays) inquired how Essent is managing risk amid macro uncertainty and tariff headlines. Casale confirmed selective pricing increases but described a “wait and see” approach on broader pricing changes pending market events.
• Terry Ma (Barclays) also asked about credit loss expectations given current default rates. Casale said defaults are within expectations, and not all result in claims due to strong borrower quality and housing equity.
• Bose George (KBW) requested detail on the timing and size of share buybacks. CFO David Weinstock specified $157 million repurchased in Q1 and $61 million in April, underscoring capital return priorities.
• Mihir Bhatia (Bank of America) questioned whether unit economics on new business have shifted with higher rates. Casale responded that unit economics have remained strong, aided by past pricing actions and prudent underwriting.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will be watching (1) the pace of improvement in housing affordability and its impact on new mortgage insurance volume, (2) persistency rates as interest rate movements affect refinancing behavior, and (3) the company’s capital deployment, including the balance between share buybacks, dividends, and potential strategic investments. The ongoing performance of Essent’s title insurance business and any industry consolidation will also be important to monitor.

Essent Group currently trades at $61.90, up from $58.67 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

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