Business Development Manager

Stewart Information Services (STC) reported higher third-quarter 2026 revenue but lower net income and earnings per share than a year earlier. Its shares fell 10.5% on the day of the report to $44.07 and are down 37.03% year to date. A popular investor narrative puts fair value at $76.25, implying the stock is 42% undervalued. It cites commercial title growth in energy, data centres, and industrial projects, where revenue roughly doubled to about $450 million over four quarters. A discounted cash flow model from Simply Wall St gives a lower value of $36.37, which would make the stock overvalued. Risks include a prolonged weak housing market and rising operating costs that squeeze margins.

What Stewart Information Services (STC) said on its Q3 earnings call. Stewart Information Services (NYSE:STC) reported third-quarter 2026 net income of $30 million, or $0.98 per diluted share, compared with $44 million, or $1.55 per share, a year earlier, as higher mortgage rates and weaker residential transaction activity pressured margins. On an adjusted basis, net income was $41 million, or $1.33 per diluted share, down from $47 million, or $1.64 per share, in the prior-year quarter. CEO Fred Eppinger said the residential housing market appeared to be establishing "a new lower bottom" during the quarter as 30-year mortgage rates climbed and reached roughly 7.5% in October. Existing-home sales fell below an annualized 4 million rate in two of the three months of the quarter, he said, with August and September activity down about 3% to 4% year over year. "We believe the residential market conditions will continue to decay into the next quarter," Eppinger said, adding that the company would focus on investment and expense efficiency while retaining resources needed to serve clients and pursue opportunities arising from industry disruption. Title revenue rises, but profit declines. Title-segment operating revenue increased $31 million, or 5%, from the prior year, driven primarily by agency and direct commercial revenue. However, title operating expenses rose 6%, reflecting higher revenue as well as employee costs associated with selected growth investments. Title pretax income declined to $47 million from $62 million a year earlier. On an adjusted basis, title pretax income was $52 million, down from $61 million in the prior-year quarter. Direct title revenue rose $6 million, or 2%, largely due to commercial transactions. Domestic commercial revenue increased $7 million, or 9%, as closed orders increased 18% across multiple asset classes. Average revenue per commercial file declined 8% to $16,300, however, which CFO David Hisey attributed to smaller transaction sizes and less data-center and energy activity. Domestic non-commercial revenue increased $3 million, or 2%. International revenue declined $4 million, or 10%, primarily because the prior-year period included a large commercial transaction. Eppinger said Canadian residential existing-home sales have been decelerating since September 2025, while international commercial revenue totaled $7.3 million and was consistent sequentially with the second quarter. Agency gross revenue increased $25 million, or 7%, including growth across a majority of the company's key agency states. Net of agent retention, agency revenue increased $5 million, or 8%. Residential agency premiums increased 7%, while commercial agency premiums climbed 25%, according to Eppinger. The title loss ratio was 3.4%, comparable with the year-earlier level. Hisey said Stewart expects title losses to average in the mid-3% to 4% range over a full year. Commercial pipeline and acquisitions. Eppinger said national commercial services continued to perform solidly, with overall commercial revenue up 9%. He said some commercial closings were pushed into the fourth quarter, involving "multiple billions" of dollars across a handful of transactions, but indicated there was no sign those deals would not close in the next quarter. The company's commercial pipeline and open orders remain strong, he said, while Stewart has not yet experienced a slowdown in data-center-related activity. Eppinger noted, however, that the company has heard of slowing activity in smaller, debt-oriented commercial transactions elsewhere in the market. Stewart continued expanding through acquisitions. During the quarter, it added Tower Title, which expands its commercial energy and infrastructure capabilities in telecommunications, and acquired Rattikin Title to strengthen its Dallas-Fort Worth presence, particularly in Fort Worth. The company also added ProTitleUSA and DocSolutionUSA to its centralized title operations, which serve investors and capital-markets clients. Hisey said Stewart deployed about $150 million during the year on acquisitions including Nationwide Appraisal Network, ProTitle and Tower Title. The ProTitle and Tower acquisitions closed late in the third quarter and had only a marginal effect on quarterly results, management said. Real estate solutions growth comes with margin pressure. Real estate solutions revenue increased $80 million, or 68%, primarily due to the MCS acquisition and growth in credit information and valuation services. Excluding the effect of the MCS and ProTitle acquisitions, Eppinger said revenue in the business rose 7%. Adjusted pretax income in the segment increased 56% to $20 million from $13 million a year earlier, while adjusted pretax margin declined to 10.4% from 11%. Eppinger said the margin pressure reflected slower orders and revenue from existing customers in Informative Research, Stewart's credit-data business, and in its appraisal operation. He said those businesses are affected not only by completed mortgage closings, but also by mortgage applications and cancellations. The company experienced higher cancellations during the quarter, which Eppinger said reached roughly 15% of transactions, along with fewer mortgage applications. Management expects segment margins to remain around current levels for the next couple of quarters. Eppinger said a more stable residential market could support margins of roughly 13% to 14% at an existing-home-sales pace of approximately 4.1 million to 4.2 million annually. Capital position, automation and dividend. Stewart ended the quarter with approximately $300 million of cash and investments above statutory reserve-fund requirements. Stockholders' equity was approximately $1.7 billion, or about $55 per share in book value. Operating cash flow was $47 million, down from $93 million a year earlier, primarily due to lower net operating income and the timing of operating-liability payments. The company's employee-cost ratio improved to 26% from 27%, while its other operating expense ratio increased to 29% from 24%, reflecting the growing contribution of real estate solutions, which carries higher service costs as a percentage of revenue. Eppinger said Stewart has more than 100 artificial intelligence and automation initiatives underway, with about 50 already being tracked for operational returns. He expects the more substantial financial impact to emerge over roughly 18 months, particularly through title-search efficiency, accuracy and turnaround improvements. Stewart also increased its annual dividend to $2.20 per share from $2.10 per share, marking its seventh dividend increase in just under six years. About Stewart Information Services (NYSE:STC). Stewart Information Services Corporation (NYSE: STC) is a global provider of title insurance and real estate transaction services. Through its Stewart Title operations, the company helps protect property owners, lenders and other participants from losses arising from defects in a property's title. The company offers title searches and examinations, title insurance policies, escrow and closing services, settlement services, and related solutions for residential and commercial real estate transactions.