Mortgage insurance provider Essent Group (NYSE: ESNT) beat Wall Street’s revenue expectations in Q3 2026, with revenue up 20% year on year to $374.2 million. Its GAAP profit of $1.82 per share was 2.5% below analysts’ consensus estimates.

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“Our third quarter results reflect the earnings power of our mortgage insurance and reinsurance franchise,” said Mark A. Casale, Chairman and Chief Executive Officer. “With the solid credit quality of our insurance in force and our strong capital position, we are well positioned to deliver high-quality earnings with continued flexibility to invest in the business and return capital to shareholders.”

Revenue growth

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. Essent Group’s revenue grew at a mediocre 6.3% annualized rate over the last five years, falling short of the insurance sector benchmark.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Essent Group’s annualized revenue growth of 6.3% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak. Note: Quarters not shown were determined to be outliers because they were impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Essent Group reported year-on-year revenue growth of 20%, and its $374.2 million of revenue exceeded Wall Street’s consensus estimates by 6%.

Net premiums earned made up 80.4% of the company’s total revenue during the last five years, meaning Essent Group barely relies on non-insurance activities to drive its overall growth.

The market cares primarily about an insurer’s net premiums earned growth as investment and fee income are considered more susceptible to market volatility and economic cycles.

Book value per share (BVPS)

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

BVPS is therefore important to track for insurers and sheds light on business quality because it reflects long-term capital growth and is harder to manipulate than more commonly used metrics like earnings per share, or EPS.

Essent Group’s BVPS grew at an impressive 10.7% annual rate over the last five years. However, BVPS growth has recently decelerated slightly to 8.5% annual growth over the last two years (from $53.11 to $62.58 per share).

Key takeaways from Essent Group’s Q3 results

Essent Group’s sizable revenue beat was a positive in Q3, but EPS missed expectations, making this a softer quarter overall. Shares remained flat at $68.54 immediately after the report.

When evaluating Essent Group as an investment, consider the bigger picture of valuation, business quality and the latest earnings. Read the full research report here (it’s free).