SelectQuote, Inc. (NYSE:SLQT) Released Earnings Last Week And Analysts Lifted Their Price Target To US$4.50

It's been a pretty great week for SelectQuote, Inc. (NYSE:SLQT) shareholders, with its shares surging 17% to US$2.34 in the week since its latest quarterly results. Revenues of US$292m beat expectations by a respectable 6.0%, although statutory losses per share increased. SelectQuote lost US$0.26, which was 32% more than what the analysts had included in their models. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on SelectQuote after the latest results.

View our latest analysis for SelectQuote

Taking into account the latest results, the current consensus from SelectQuote's three analysts is for revenues of US$1.44b in 2025. This would reflect a satisfactory 4.4% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 39% to US$0.17. Before this earnings announcement, the analysts had been modelling revenues of US$1.44b and losses of US$0.15 per share in 2025. While this year's revenue estimates held steady, there was also a considerable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

Although the analysts are now forecasting higher losses, the average price target rose 13% to 4, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on SelectQuote, with the most bullish analyst valuing it at US$5.00 and the most bearish at US$4.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that SelectQuote's revenue growth is expected to slow, with the forecast 6.0% annualised growth rate until the end of 2025 being well below the historical 20% p.a. growth over the last five years. Compare this to the 122 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.2% per year. Factoring in the forecast slowdown in growth, it looks like SelectQuote is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on SelectQuote. Long-term earnings power is much more important than next year's profits. We have forecasts for SelectQuote going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for SelectQuote (1 is a bit concerning) you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.