Enact Holdings’ fourth quarter was marked by disciplined execution and strong credit performance, resulting in a positive market response. Management credited robust new insurance written volumes, prudent risk selection, and the continued rollout of their Rate360 pricing engine as key drivers. CEO Rohit Gupta highlighted that “cure performance continues to outperform our expectations,” due in part to effective loss mitigation and favorable borrower behavior. Additionally, the company benefited from a significant net reserve release, enabled by improved claim rates and sustained portfolio quality.
Is now the time to buy ACT? Find out in our full research report (it’s free for active Edge members).
Enact Holdings (ACT) Q4 CY2025 Highlights:
- Revenue: $315.6 million vs analyst estimates of $315.7 million (2.1% year-on-year growth, in line)
- Adjusted EPS: $1.23 vs analyst estimates of $1.10 (11.9% beat)
- Adjusted Operating Income: $225.9 million (71.6% margin, 5.1% year-on-year growth)
- Market Capitalization: $6.12 billion
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 From Enact Holdings’s Q4 Earnings Call
- Douglas Harter (UBS): asked about sensitivities affecting the $500 million capital return target for 2026. CFO Dean Mitchell stated that capital returns will depend on business performance, macroeconomic trends, and regulatory changes, but management remains confident in the current target.
- Mihir Bhatia (Bank of America): inquired about regulatory risks, including a potential FHA rate cut and other affordability initiatives. CEO Rohit Gupta said management is actively engaged with policymakers and monitors a wide range of policy proposals, though no single regulatory action is currently expected to have an outsized impact.
- Mihir Bhatia (Bank of America): also asked about 2026 mortgage market assumptions. Gupta responded that planning is based on a range of 10–15% market growth, referencing external forecasts and acknowledging originations are sensitive to rate volatility.
- Mihir Bhatia (Bank of America): sought clarity on default rates. CFO Dean Mitchell explained that delinquency rates are in line with expectations and may continue to moderate, with vintage seasoning and geographic trends factored into risk management.
- Bose George (KBW): questioned technology’s role in expense control and long-term expense ratio prospects. CEO Rohit Gupta confirmed that technology investments have enabled flat expenses since the IPO, but long-term improvement in expense ratio will depend on both future efficiencies and premium growth.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the trajectory of purchase mortgage origination growth and how it translates to new insurance written, (2) the persistence of credit quality amid shifting macroeconomic and regulatory conditions, and (3) the company’s ability to sustain flat operating expenses while delivering planned capital returns. We will also watch for updates on Rate360’s market adoption and the impact of potential policy changes on portfolio performance.
Enact Holdings currently trades at $42.39, up from $40.33 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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