Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

SelectQuote Stock Bestows A Bargain Opportunity

By MarketBeat.com (Jea Yu )Stock MarketsSep 08, 2021 06:06AM ET
www.investing.com/analysis/selectquote-stock-bestows-a-bargain-opportunity-200601272
SelectQuote Stock Bestows A Bargain Opportunity
By MarketBeat.com (Jea Yu )   |  Sep 08, 2021 06:06AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Direct-to-consumer (DTC) insurance platform Selectquote (NYSE:SLQT) stock has collapsed from a high of $33.13 to a low of $7.72 In six months to provide a potential bargain opportunity. The insurance platform sells a number of insurance policies from various insurers acting as a middleman, not an insurer. There are three segments Seniors, Life and Auto & Home. It also sells senior Medicare advantage and supplemental policies. The pandemic has caused consumers to consider getting health coverage especially with expanded open season extensions. SelectQuote enables consumers to compare policy coverage and pricing across a number of carriers to as the platform helps them shop for the best value. The Company also deems itself the nation’s number one term insurance company and has over two million users. The Company is not a new fintech or fly-by-night rather it has been in business for over 35 years. Recent analyst downgrades have plunged shares on weak guidance, but the reopening trends should provide a tailwind. Prudent investors can watch for opportunistic pullback levels for exposure in the DTC insurance market.

Q4 Fiscal 2021 Earnings Release

On Aug. 25, 2021, SelectQuote released its fiscal fourth-quarter 2021 results for the quarter ending June 2021. The Company reported GAAP earnings-per-share (EPS) loss of (-$0.02) missing consensus analyst estimates for a loss of (-$0.01) by $0.01. Revenues rose 33.2% year-over-year (YoY) to $188.45 million, beating consensus analyst estimates for $186.58 million. Adjusted EBITDA few (-47%) YoY to $21.3 million. The Senior segment grew $42% YoY to 124.4 million. The Life segment revenues grew 41% YoY to $59.9 million. The Auto and Home segment fell (-41%) YoY to $7.2 million. The fiscal full-year 2021 growth rate is 76% YoY to $937.8 million.

CEO and CFO Comments

SelectQuote CEO Tim Danker stated:

“2021 was a landmark year for SelectQuote both in terms of our growth but also in the significant opportunity established through the initiation of our Population Health (PHIC) strategy. For the full year we grew Adjusted EBITDA by $74.0 million or nearly 50% following growth of 46% in 2020. We continue to have high conviction in our differentiated model and our ability to scale quality growth in 2022 and beyond. We believe that SelectQuote’s strong connection with our end customers creates differentiated value and we expect Population Health to strengthen that bond in the years to come.”

SelectQuote CFO Raffaele Sadun commented:

“Our Senior full-year revenues grew 101% year-over-year, which follows full-year growth of 88% in fiscal 2020. New MA approved policies also grew in excess of 100% at attractive unit economics with a Revenue to CAC of 3.0x. Our MA LTV was down 2% for the year, which includes a full-year true-up in our 4th Quarter results for additional provision due to higher than expected intra-year lapse rates. Despite some persistency pressure compared to original expectations, we expect cohort-level IRRs to remain very attractive.”

Conference Call Takeaways

CEO Danker talked about risks moving forward:

“The larger tail adjustment taken in 2021 was primarily driven by lower than expected persistency tied to the introduction of OEP. As you can see, our original IRR expectation for the 2019 cohort was 45%. And as a result of our adjustments to date, the expected IRR is now trending to 39%. Additionally, we would note that the current realized IRR in the cohort is already 13%. Now if we turn to 2020. We are seeing the same types of pressure impact this cohort but to date we have had enough constraint to offset this pressure. That said, we have utilized a significant portion of our constraint due to lower than model persistency.” He underscored, “As a result, our fiscal 2022 guidance contemplates the risk of potential cohort tail adjustments which would impact the cohort as depicted by the grey line on this chart. Regarding the 2020 cohort, lower persistency was driven primarily by the introduction of OEP. Again, for context, our adjusted trend for 2020 assuming tail adjustment next year would still generate an IRR of 24% compared to our original 28% expectation.”

SelectQuote Inc Stock Chart
SelectQuote Inc Stock Chart

SLQT Opportunistic Pullback Levels

Using the rifle charts on the weekly and daily time frames provides a near-term precision view of the price action playing field for SLQT shares. The weekly rifle chart peaked at the $33.13 Fibonacci (fib) level before triggering the weekly market structure sell on the breakdown below $24.64 plunging all the way down to the $7.72 fib. The weekly 5-period moving average (MA) resistance is falling at $13.15 and 15-period MA falling at $17.08. The weekly stochastic has just started to finally cross back up as shares staged a rally to form a weekly market structure low (MSL) buy trigger about $12.37. The daily rifle chart completed the channel tightening with the rising 5-period MA at $10.52 and 15-period MA at $11.93. The daily stochastic has formed a mini pup through the 20-band. Prudent investors can watch for opportunistic pullbacks at the $10.42 fib, $9.24 fib, $8.53 fib, $7.72 fib, $6.74 fib, and the $5.81 fib. The upside trajectories range from the $15.38 fib towards the $23.45 fib level.

Original Post

SelectQuote Stock Bestows A Bargain Opportunity
 

Related Articles

SelectQuote Stock Bestows A Bargain Opportunity

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email