Enact Holdings (ACT): Is the Quietly Compounding Stock Still Undervalued?

Enact Holdings (ACT) shares have moved slightly in recent trading, catching investor attention as market participants look for clarity on the company’s performance. Recent price action comes amid a relatively quiet news cycle for the stock.

See our latest analysis for Enact Holdings.

Enact Holdings has quietly built momentum this year, posting a 14.5% year-to-date share price return and delivering a robust 12.1% total shareholder return over the past 12 months. While near-term moves have been favorable, the longer-term picture points to consistent value creation as the stock’s three-year total return stands at an impressive 65%.

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The question for investors now becomes: with shares still trading below analyst targets and value metrics looking strong, is Enact Holdings undervalued, or is the market already pricing in the company's growth potential?

Most Popular Narrative: 7.5% Undervalued

Enact Holdings closed at $37, a notable distance below the $40 fair value implied by the most widely followed narrative. This establishes a scenario where near-term upside remains possible, especially as recent gains have pushed the share price closer to analyst expectations.

Persistent demographic tailwinds from millennial and Gen Z homebuyer demand, combined with a continued national supply-demand imbalance, are expected to support steady mortgage originations and boost Enact's insurance in force and premium volumes, directly benefiting revenue and long-term earnings growth.

Read the complete narrative.

Curious what hidden levers drive this valuation? The real story weaves together robust future revenue, disciplined capital returns, and a profit outlook that defies shifting economic headwinds. Find out which bold assumptions form the backbone of this attractive target. One number in particular might surprise you.

Result: Fair Value of $40 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, lingering concerns about elevated mortgage rates and potential housing market softness could weigh on Enact Holdings' future revenue and margin outlook.

Find out about the key risks to this Enact Holdings narrative.

Build Your Own Enact Holdings Narrative

If you think the story could be different or want to dig into the figures yourself, it's never been easier to craft your own perspective in under three minutes, so Do it your way

A great starting point for your Enact Holdings research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

Story Continues

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include ACT.

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