SelectQuote (NYSE:SLQT) Announces Quarterly Earnings Results

Key Points

• SelectQuote beat quarterly estimates: It reported an adjusted loss of $0.21 per share versus the expected $0.33 loss, while revenue of $280 million modestly exceeded forecasts.
• Adjusted EBITDA loss improved by more than $15 million year over year to $17 million, despite revenue declining 15%. Management reiterated its goal of at least $60 million in fiscal 2027 operating cash flow and said it has removed more than $30 million in annualized costs.
• The company is prioritizing profitability as Medicare plan changes weigh on policy volumes. Healthcare Services adjusted EBITDA rose 56% to $11 million, and management expects technology and efficiency initiatives to support further margin improvement.

SelectQuote (NYSE:SLQT - Get Free Report) released its earnings results on Wednesday. The company reported ($0.21) EPS for the quarter, beating the consensus estimate of ($0.33) by $0.12, FiscalAI reports. The business had revenue of $280.01 million during the quarter, compared to analyst estimates of $277.91 million. SelectQuote had a net margin of 3.84% and a return on equity of 19.70%.

Here are the key takeaways from SelectQuote's conference call:

• Adjusted EBITDA loss improved by more than $15 million year over year to $17 million, despite revenue falling 15% to $280 million. Management reiterated its target of at least $60 million in fiscal 2027 operating cash flow.
• SelectQuote is operating with a smaller Senior agent force and is prioritizing profitability over sales volume amid continued Medicare Advantage plan changes. The company has not changed its cautious outlook for policy volumes, though it said agent productivity and technology may help offset the headwind.
• Early AEP engagement is encouraging, and agents have contacted more than half of beneficiaries facing plan terminations; management aims to exceed last year’s 30% recapture rate. Executives emphasized that results are still early and the season remains dynamic.
• Healthcare Services adjusted EBITDA rose 56% to $11 million and EBITDA per SelectRx member increased more than 60%, even as segment revenue fell 16%, primarily due to the Inflation Reduction Act. Management expects the pharmacy management system and facility efficiencies to support further margin improvement, including a goal to double Healthcare Services margins in fiscal 2027.
• The company said it has removed more than $30 million in permanent annualized costs and is using AI to improve agent productivity and streamline enrollment. Management cited faster automated enrollments and expects these technology investments to support profitability and scalability.

SelectQuote Stock Performance

Shares of SLQT traded up $0.09 during trading hours on Wednesday, reaching $0.50. 5,090,436 shares of the company traded hands, compared to its average volume of 1,545,860. SelectQuote has a 1-year low of $0.30 and a 1-year high of $2.17. The company has a debt-to-equity ratio of 0.99, a quick ratio of 6.57 and a current ratio of 6.57. The stock has a market cap of $88.91 million, a P/E ratio of -6.27 and a beta of 2.01. The stock's fifty day moving average is $0.43 and its 200 day moving average is $0.78.

Analysts Set New Price Targets

A number of research firms recently weighed in on SLQT. Zacks Research upgraded SelectQuote from a "strong sell" rating to a "hold" rating in a research report on Monday, October 26th. Wall Street Zen downgraded shares of SelectQuote from a "hold" rating to a "sell" rating in a research note on Saturday, August 29th. Finally, Weiss Ratings downgraded SelectQuote from a "sell (d+)" rating to a "sell (d)" rating in a report on Monday, August 17th. One equities research analyst has rated the stock with a Strong Buy rating, two have assigned a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat.com, the company presently has a consensus rating of "Hold" and a consensus target price of $3.00.

SelectQuote Company Profile

SelectQuote, Inc NYSE: SLQT operates a technology-enabled insurance distribution platform that helps consumers compare and purchase insurance products from third-party carriers. The company combines digital tools, proprietary data and licensed agents to connect customers with coverage suited to their needs.

SelectQuote's primary business is its Senior segment, which provides access to Medicare Advantage, Medicare Supplement and prescription drug plans. The company has also historically offered life insurance, as well as auto and home insurance, through its Life and Auto & Home businesses.

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