Essent Group currently trades at $60.50 per share and has shown little upside over the past six months, posting a small loss of 0.7%.

Is there a buying opportunity in Essent Group, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it’s free.

Why Is Essent Group Not Exciting?

We're sitting this one out for now. Here are three reasons there are better opportunities than ESNT and a stock we'd rather own.

1. Net Premiums Earned Point to Soft Demand

Net premiums earned are net of what’s paid to reinsurers (insurance for insurance companies), which are used by insurers to protect themselves from large losses.

Essent Group’s net premiums earned has grown at a 2.7% annualized rate over the last five years, much worse than the broader insurance industry and slower than its total revenue.

2. Recent EPS Growth Below Our Standards

Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.

Essent Group’s EPS grew at a weak 3% compounded annual growth rate over the last two years, lower than its 6.6% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

Final Judgment

Essent Group isn’t a terrible business, but it doesn’t pass our bar. That said, the stock currently trades at 1× forward P/B (or $60.50 per share). While this valuation is fair, the upside isn’t great compared to the potential downside. We're pretty confident there are superior stocks to buy right now. Let us point you toward one of our top software and edge computing picks.

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