Title company 2Q earnings are a mixed bag

Doma Holdings, the newest of the publicly traded title underwriters, lost $58.7 million in the second quarter, compared with losses of $50 million in the first quarter and $23.3 million in the second quarter of 2021.

Open orders fell to 25,231 from 35,192 for the previous three months and 41,491 one year prior. Over the same time frame, closed orders were 18,799 from 27,347 and 31,436. This missed estimates by 32% for open orders and 39% for closed orders, Gilbert’s report on Doma said.

“The title and real estate settlement industry is rapidly evolving and we believe there is room for a digital-first company Doma rapidly and take share from technological laggards,” Gilbert said. “However, we do not believe the core product — instant title commitments on centralized refinance loans — is meaningfully differentiated from what is currently on offer from the public incumbent title insurers.”

While Doma has redirected to a path that generates more purchase business, market share growth is more difficult, Gilbert added.

“Because of the high degree of volatility in the mortgage market, most of which is being driven by macroeconomic factors outside of Doma’s control, we are being strategically selective with our investments and are prudently managing our expenses, including prioritizing profitability and preserving cash over growth,” said Mike Smith, chief financial officer, said in a press release. “We believe that we have taken meaningful actions to guard against the uncertainty in the mortgage market in the back half of this year and to protect our bottom-line results.”

On Aug. 4, Doma revealed it received a notice from the New York Stock Exchange that it was out of compliance with rules requiring its common stock not trade below $1 per share for 30 consecutive trading days.

If it otherwise does not regain compliance, Doma’s management is proposing executing a reverse stock split if shareholders approve at its next annual meeting.

In the past 52 weeks, Doma’s stock hit a high of $9.10 per share but more recently fell to a low of 69 cents per share. The price did break back above $1 per share on Aug. 12 and Aug. 15, but to regain compliance with NYSE rules, it has to be above $1 for at least