Insurance marketplace SelectQuote Q4 revenue beats estimates helped by healthcare services business

Overview

• SelectQuote Q4 FY2025 revenue rises to $345.1 mln, beating analyst expectations, per LSEG data

• Net income for Q4 FY2025 at $12.9 mln, a turnaround from last year's loss

• Adjusted EBITDA of $2.7 mln for Q4 FY2025 exceeds analyst estimates

Outlook

• SelectQuote expects FY 2026 revenue between $1.650 bln and $1.750 bln

• Company projects FY 2026 adjusted EBITDA between $120 mln and $150 mln

Result Drivers

• SENIOR SEGMENT DECLINE - Senior segment revenue fell 28% and adjusted EBITDA dropped 72%, attributed to changes in Medicare Advantage

• HEALTHCARE SERVICES GROWTH - Healthcare Services segment revenue rose 47% and adjusted EBITDA surged 1,204%, driven by a 31% increase in SelectRx members

• LIFE SEGMENT STABILITY - Life segment revenue increased 14%, although adjusted EBITDA decreased by 4%

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the multiline insurance & brokers peer group is "buy"

• Wall Street's median 12-month price target for SelectQuote Inc is $6.00, about 69.5% above its August 20 closing price of $1.83

• The stock recently traded at 27 times the next 12-month earnings vs. a P/E of 23 three months ago

Press Release: ID:nBw7rYfQka