Enact Holdings Inc (ACT) Fair Value: 38% Upside

Enact Holdings Inc (ACT) Fair Value Analysis: 38% Upside Potential

Enact Holdings Inc (ACT), a leading private mortgage insurer, currently trades at USD 45.51 while our comprehensive valuation models point to a fair value of USD 62.79. This implies substantial upside of +38.0% with a solid Quality Score of 76/100, leading to our verdict that the stock is undervalued.

What Enact Holdings Does

Enact provides borrower-centric private mortgage insurance products that enable lenders to offer home loans with lower down payments while protecting against default risk. Serving over 1,800 lender partners across the U.S., the company emphasizes prudent underwriting, strong risk management and seamless technology integration. As a subsidiary of Genworth Financial, Enact benefits from deep expertise in the housing finance ecosystem.

Recent Performance and Market Context

In Q1 2026, Enact reported GAAP net income of $168 million ($1.18 per share) and adjusted operating income of $172 million ($1.21 per share). Revenue came in at approximately $312 million amid flat year-over-year sales but with an EPS beat. The company highlighted robust credit performance, elevated persistency and returned $123 million to shareholders through dividends and buybacks. A 14% dividend increase was announced alongside plans to return around $500 million in 2026. Q2 2026 earnings are scheduled for August 6.

Key Valuation Drivers Behind Our Fair Value Estimate

Our 21-model framework incorporates discounted cash flow, peer multiples and asset-based approaches anchored to Enact’s strong return on equity (around 12.5% adjusted), aggressive share repurchases that have reduced the share count significantly over time, and consistent capital generation in the mortgage insurance business. The Quality Score of 76/100 reflects solid balance sheet strength and earnings stability that support a premium to current market pricing. Capital return programs and housing market resilience further underpin the $62.79 fair value target.

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Main Risks to Consider

• Housing market cyclicality: A slowdown in home sales or price declines could increase claims and pressure new insurance written.
• Interest rate sensitivity: Higher rates typically reduce mortgage originations and insurance demand.
• Regulatory and competitive pressures: Changes in GSE policies or increased competition from other insurers may affect margins.
• Parent company dynamics: Enact’s results influence Genworth, introducing some external dependencies.

Balanced Verdict

Enact Holdings Inc stands out as undervalued on our models, offering attractive risk-adjusted returns through a combination of earnings power, shareholder-friendly capital allocation and defensive qualities in the financials sector. Investors should monitor upcoming earnings and housing indicators closely. This is not financial advice; always conduct your own research.

Ready to run your own scenarios? Check the free Fair Value Calculator to analyze Enact Holdings Inc alongside 35,000+ other stocks using 21 valuation models and our proprietary Quality Score.

Frequently Asked Questions

What does Enact Holdings do?

Enact Holdings Inc is a leading U.S. provider of private mortgage insurance that helps lenders enable responsible homeownership while managing credit risk.

Why is Enact Holdings undervalued?

Our models show ACT trading 38% below its $62.79 fair value thanks to strong capital returns, robust earnings and conservative risk management not fully reflected in the current price.

What are the main risks for Enact Holdings stock?

Key risks include housing market downturns, rising interest rates reducing mortgage originations, and competition in the mortgage insurance sector.

Sources

Context gathered via live web search while writing this article:

• https://www.google.com/finance/beta/quote/ACT:NASDAQ
• https://finance.yahoo.com/news/assessing-enact-holdings-act-valuation-070746521.html
• https://simplywall.st/stocks/us/diversified-financials/nasdaq-act/enact-holdings/valuation
• https://ir.enactmi.com/financials-and-filings/quarterly-results
• https://enact.gcs-web.com/news-and-events/events/
• https://www.marketscreener.com/quote/stock/ENACT-HOLDINGS-INC-212708717/ratings/
• https://finance.yahoo.com/markets/stocks/articles/enact-holdings-inc-act-misses-220503951.html
• https://www.sec.gov/Archives/edgar/data/1823529/000162828021008731/genworthmortgageholdingsin.htm