Fidelity National Financial (FNF)

Title insurance company Fidelity National Financial (NYSE:FNF) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 11.9% year on year to $4.03 billion. Its non-GAAP profit of $1.63 per share was 14.5% above analysts’ consensus estimates.

Company Overview

Issuing more title insurance policies than any other company in the United States, Fidelity National Financial (NYSE:FNF) provides title insurance and escrow services for real estate transactions while also offering annuities and life insurance through its F&G subsidiary.

Property & Casualty (P&C) insurers protect individuals and businesses against financial loss from damage to property or from legal liability. This is a cyclical industry, and the sector benefits when there is 'hard market', characterized by strong premium rate increases that outpace loss and cost inflation, resulting in robust underwriting margins. The opposite is true in a 'soft market'. Interest rates also matter, as they determine the yields earned on fixed-income portfolios. On the other hand, P&C insurers face a major secular headwind from the increasing frequency and severity of catastrophe losses due to climate change. Furthermore, the liability side of the business is pressured by 'social inflation'—the trend of rising litigation costs and larger jury awards.

FNF's primary competitors in the title insurance industry include First American Financial Corporation, Old Republic International Corporation, Stewart Information Services Corporation, Westcor Land Title Insurance Company, Title Resources Guaranty Company, and WFG National Title Insurance Company. In the annuity and life insurance segment, F&G competes with various insurance carriers offering similar retirement and protection products.

Insurance companies earn revenue from three primary sources: 1) The core insurance business itself, often called underwriting and represented in the income statement as premiums 2) Income from investing the “float” (premiums collected upfront not yet paid out as claims) in assets such as fixed-income assets and equities 3) Fees from various sources such as policy administration, annuities, or other value-added services. Thankfully, Fidelity National Financial’s 8.4% annualized revenue growth over the last five years was decent. Its growth was slightly above the average insurance company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Fidelity National Financial’s annualized revenue growth of 13.5% over the last two years is above its five-year trend, suggesting its demand recently accelerated. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Fidelity National Financial reported year-on-year revenue growth of 11.9%, and its $4.03 billion of revenue exceeded Wall Street’s estimates by 13%.

Net premiums earned made up 47.4% of the company’s total revenue during the last five years, meaning Fidelity National Financial’s growth drivers strike a balance between insurance and non-insurance activities.

Net premiums earned commands greater market attention due to its reliability and consistency, whereas investment and fee income are often seen as more volatile revenue streams that fluctuate with market conditions.

Insurers sell policies then use reinsurance (insurance for insurance companies) to protect themselves from large losses. Net premiums earned are therefore what's collected from selling policies less what’s paid to reinsurers as a risk mitigation tool.

Fidelity National Financial’s net premiums earned was flat over the last five years, much worse than the broader insurance industry. This shows that policy underwriting underperformed its other business lines.

When analyzing Fidelity National Financial’s net premiums earned over the last two years, we can see that growth accelerated to 8.1% annually. Since two-year net premiums earned grew slower than total revenue over this period, it’s implied that other line items such as investment income grew at a faster rate. While these supplementary streams affect the bottom line, their contribution can fluctuate. Some firms have been more successful and consistent in investing their float over the long term, but sharp movements in the fixed income and equity markets can play a substantial role in short-term performance.

Revenue growth is one major determinant of business quality, and the efficiency of operations is another. For insurance companies, we look at pre-tax profit rather than the operating margin that defines sectors such as consumer, tech, and industrials.

The economics of insurers are driven by their balance sheets, where assets (investing the float + premiums receivable) and liabilities (claims to pay) define the fundamentals. Interest income and expense should therefore be factored into the definition of profit but taxes - which are largely out of a company’s control - should not.

Over the last four years, Fidelity National Financial’s pre-tax profit margin has risen by 11.7 percentage points, going from 23.2% to 11.5%. Luckily, it seems the company has recently taken steps to address its expense base as its pre-tax profit margin expanded by 4 percentage points on a two-year basis.

Fidelity National Financial’s pre-tax profit margin came in at 11.2% this quarter. This result was 2.5 percentage points better than the same quarter last year.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Fidelity National Financial’s EPS grew at a weak 2.9% compounded annual growth rate over the last five years, lower than its 8.4% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded due to factors such as interest expenses and taxes.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Fidelity National Financial, its two-year annual EPS growth of 13.4% was higher than its five-year trend. Accelerating earnings growth is almost always an encouraging data point.

In Q3, Fidelity National Financial reported adjusted EPS of $1.63, up from $1.30 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Fidelity National Financial’s full-year EPS of $4.91 to grow 27.2%.

Insurers are balance sheet businesses, collecting premiums upfront and paying out claims over time. Premiums collected but not yet paid out, often referred to as the float, are invested and create an asset base supported by a liability structure. Book value per share (BVPS) captures this dynamic by measuring these assets (investment portfolio, cash, reinsurance recoverables) less liabilities (claim reserves, debt, future policy benefits). BVPS is essentially the residual value for shareholders.

We therefore consider BVPS very important to track for insurers and a metric that sheds light on business quality because it reflects long-term capital growth and is harder to manipulate than more commonly-used metrics like EPS.

Fidelity National Financial’s BVPS grew at a tepid 5% annual clip over the last five years. However, BVPS growth has accelerated recently, growing by 17.2% annually over the last two years from $22.63 to $31.06 per share.

The debt-to-equity ratio is a widely used measure to assess a company's balance sheet health. A higher ratio means that a business aggressively financed its growth with debt. This can result in higher earnings (if the borrowed funds are invested profitably) but also increases risk.

If debt levels are too high, there could be difficulties in meeting obligations, especially during economic downturns or periods of rising interest rates if the debt has variable-rate payments.

Fidelity National Financial currently has $4.40 billion of debt and $8.36 billion of shareholder's equity on its balance sheet, and over the past four quarters, has averaged a debt-to-equity ratio of 0.6×. We think this is safe and raises no red flags. In general, we’re comfortable with any ratio below 1.0× for an insurance business. Anything below 0.5× is a bonus.

Return on Equity, or ROE, ties everything together and is a vital metric. It tells us how much profit the insurer generates for each dollar of shareholder equity entrusted to management. Over a long period, insurers with higher ROEs tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.

Over the last five years, Fidelity National Financial has averaged an ROE of 17.8%, excellent for a company operating in a sector where the average shakes out around 12.5% and those putting up 20%+ are greatly admired. This is a bright spot for Fidelity National Financial.

We were impressed by how significantly Fidelity National Financial blew past analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Zooming out, we think this quarter featured some important positives. The stock traded up 1.9% to $55.61 immediately after reporting.

Updated: December 4, 2025 at 11:23 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in Fidelity National Financial.

In our opinion, Fidelity National Financial is a good company. First off, its revenue growth was good over the last five years, and analysts believe it can continue growing at these levels. And while its net premiums earned growth was weak over the last five years, its projected EPS for the next year implies the company’s fundamentals will improve. On top of that, its market-beating ROE suggests it has been a well-managed company historically.

Fidelity National Financial’s P/B ratio based on the next 12 months is 1.6x. When scanning the insurance space, Fidelity National Financial trades at a fair valuation. If you trust the business and its direction, this is an ideal time to buy.

Wall Street analysts have a consensus one-year price target of $69.80 on the company (compared to the current share price of $58.37), implying they see 19.6% upside in buying Fidelity National Financial in the short term.