Stewart Information Services delivered a quarter that surpassed Wall Street’s expectations, with management attributing the results to strong momentum in commercial and agency services businesses despite a challenging housing market. CEO Frederick Eppinger pointed to a 20% revenue increase and a 48% rise in adjusted earnings per share, crediting targeted investments in talent, expansion in small commercial, and geographic diversification. Eppinger highlighted, “Inventories have improved in volume and quality over the past several months, which could be a precursor to some improvement in the market,” while also noting that the spring selling season was muted and homes were sitting longer, reflecting ongoing affordability concerns.

Is now the time to buy STC? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Stewart Information Services’s Q2 Earnings Call

• Bose George (KBW) asked about the sustainability of commercial growth given tough year-ago comparisons. CEO Frederick Eppinger responded that while maintaining 45% growth is unlikely, Stewart expects to continue outpacing the market thanks to a strong pipeline and expansion into small commercial.
• Bose George (KBW) inquired about agency premium growth versus direct, questioning whether timing or strategic initiatives played a role. Eppinger explained that targeted hiring and new support services for agents, particularly in key states, have driven agency outperformance and commercial penetration.
• Bose George (KBW) sought clarification on the recent decline in agent retention. Eppinger attributed this to geographic mix, specifically Stewart’s smaller presence in Florida, while emphasizing that overall margins have improved due to growth in more profitable states.
• Geoffrey Dunn (Dowling & Partners) requested a breakdown of domestic commercial between small and national segments. Eppinger detailed that small commercial accounted for $19 million of the quarter’s total, highlighting the segment’s margin benefits and strategic importance for direct operations.
• Geoffrey Dunn (Dowling & Partners) asked about the mix and margins of real estate solutions offerings. Eppinger and CFO David Hisey said that credit information and appraisal remain the largest revenue drivers, with expectations for steady margin improvement as volumes recover.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will closely monitor (1) Stewart’s ability to sustain commercial growth as year-over-year comparisons become more challenging, (2) continued execution on agency expansion in targeted key states, and (3) the impact of integrating BatchLeads and BatchDialer on the PropStream platform’s adoption and revenue contribution. We will also watch for margin trends as the company balances investment with cost control.

Stewart Information Services currently trades at $65.41, up from $59.55 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).

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