Fidelity National Financial (FNF)

Title insurance company Fidelity National Financial (NYSE:FNF) announced better-than-expected revenue in Q4 CY2025, with sales up 11.9% year on year to $4.05 billion. Its non-GAAP profit of $1.41 per share was 5.8% below 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 generate revenue three ways. The first is the core insurance business itself, represented in the income statement as premiums earned. The second source is investment income from investing the “float” (premiums collected but not yet paid out as claims) in assets such as fixed-income assets and equities. The third is fees from policy administration, annuities, and other value-added services. Unfortunately, Fidelity National Financial’s 6% annualized revenue growth over the last five years was mediocre. This wasn’t a great result compared to the rest of the insurance sector, but there are still things to like about Fidelity National Financial.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Fidelity National Financial’s annualized revenue growth of 10.9% 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 $4.05 billion of revenue exceeded Wall Street’s estimates by 13%.

Net premiums earned made up 46.6% 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.

Markets consistently prioritize net premiums earned growth over investment and fee income, recognizing its superior quality as a core indicator of the company’s underwriting success and market penetration.

When insurers sell policies, they protect themselves from extremely large losses or an outsized accumulation of losses with reinsurance (insurance for insurance companies). Net premiums earned are therefore gross premiums less what’s ceded to reinsurers as a risk mitigation and transfer strategy.

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 10.2% annually. This performance was similar to its total revenue.

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 five years, Fidelity National Financial’s pre-tax profit margin has risen by 6.8 percentage points, going from 20.1% to 9.9%. Luckily, it seems the company has recently taken steps to address its expense base as its pre-tax profit margin expanded by 3.9 percentage points on a two-year basis.

Fidelity National Financial’s pre-tax profit margin came in at 11.1% this quarter. This result was 6.9 percentage points worse 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.

Sadly for Fidelity National Financial, its EPS declined by 1.3% annually over the last five years while its revenue grew by 6%. 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.

Diving into the nuances of Fidelity National Financial’s earnings can give us a better understanding of its performance. As we mentioned earlier, Fidelity National Financial’s pre-tax profit margin declined by 6.8 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

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 19.1% was higher than its five-year trend. Accelerating earnings growth is almost always a great sign.

In Q4, Fidelity National Financial reported adjusted EPS of $1.41, up from $1.34 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates. Over the next 12 months, Wall Street expects Fidelity National Financial’s full-year EPS of $4.98 to grow 24.2%.

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 $4.4 billion of debt and $7.42 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, represents the ultimate measure of an insurer's effectiveness, quantifying how well it transforms shareholder investments into profits. Over the long term, insurance companies with robust ROE metrics typically deliver superior shareholder returns through a balanced approach to capital management.

Over the last five years, Fidelity National Financial has averaged an ROE of 16.5%, impressive for a company operating in a sector where the average shakes out around 12.5% and those putting up 20%+ are greatly admired. This shows Fidelity National Financial has a strong competitive moat.

We were impressed by how significantly Fidelity National Financial blew past analysts’ revenue expectations this quarter. On the other hand, its EPS missed. Overall, this was a weaker quarter. The stock remained flat at $54.21 immediately after reporting.

Updated: February 19, 2026 at 11:28 PM EST

A common mistake we notice when investors are deciding whether to buy a stock or not is that they simply look at the latest earnings results. Business quality and valuation matter more, so we urge you to understand these dynamics as well.

In our opinion, Fidelity National Financial is a good company. Although its revenue growth was mediocre over the last five years, its projected EPS for the next year implies the company’s fundamentals will improve. And while its declining EPS over the last five years makes it a less attractive asset to the public markets, 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’re a fan of the business and management team, now is a good time to scoop up some shares.

Wall Street analysts have a consensus one-year price target of $69.60 on the company (compared to the current share price of $53.88), implying they see 29.2% upside in buying Fidelity National Financial in the short term.