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SLQT

SelectQuote NYSE:SLQT Stock Report

Last Price

US$1.06

Market Cap

US$174.3m

7D

-15.9%

1Y

-92.0%

Updated

23 Sep, 2022

Data

Company Financials +
SLQT fundamental analysis
Snowflake Score
Valuation4/6
Future Growth1/6
Past Performance0/6
Financial Health1/6
Dividends0/6

SLQT Stock Overview

SelectQuote, Inc. operates a technology-enabled, direct-to-consumer distribution platform that sells a range of insurance products and healthcare services in the United States.

SelectQuote, Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for SelectQuote
Historical stock prices
Current Share PriceUS$1.06
52 Week HighUS$14.40
52 Week LowUS$0.95
Beta1.02
1 Month Change-41.11%
3 Month Change-66.67%
1 Year Change-91.99%
3 Year Changen/a
5 Year Changen/a
Change since IPO-96.07%

Recent News & Updates

Sep 13

SelectQuote: Skeptical About The Turnaround Plan

Summary SelectQuote just finished out its fiscal Q4 and guided to revenue growth and breakeven adjusted EBITDA for FY23. This comes after a year of significant revenue decline and agent retention issues. SelectQuote's decision to pare down on operating expenses, especially on marketing, may backfire and produce larger than expected revenue decay. Already down more than 85% year to date, SelectQuote may be on its way to further pain. While I'm ordinarily a big proponent of "buy the dip" strategies during these market conditions, I think some of the year's biggest losers have also been accompanied by major swings in fundamental trajectory - and SelectQuote (NYSE:SLQT) is a great example of this. This insurance lead-gen company, which specializes in Medicare and Medicaid insurance sales to seniors, has seen a dramatic turn in its growth prospects this year, and profitability has bled as well. The markets have lost patience with SelectQuote. Year to date, the stock has lost 85% of its value, and now trading barely above $1, it's at a near-term risk of being delisted. In my view, there is little value to be salvaged here, and SelectQuote is looking at further pain up the road. SLQT data by YCharts After reviewing the company's latest guidance and turnaround plan for FY23, I remain incredibly skeptical about SelectQuote's prospects, and am very bearish on this stock. Resist the temptation to buy the dip here: I think SelectQuote is painting a much rosier outlook for FY23 than is realistically achievable. FY23 Guidance: the pitfalls Let's first discuss the company's financial targets for next year (the year ending June 2023), and then its plans for how it intends to get there. The numbers are shown below: SelectQuote FY23 outlook (SelectQuote Q2 earnings deck) As shown above, SelectQuote is aiming for 11-25% y/y revenue growth, as well as adjusted EBITDA of -$20 to $10 million, or essentially breakeven. This compares to adjusted EBITDA losses of -$260.5 million in FY22. SelectQuote FY23 strategy (SelectQuote Q2 earnings deck) The slide above showcases the company's main strategic pillars to get there. The key takeaways from this strategy are: SelectQuote intends to reduce operating expenses by $250 million year over year, driven primarily by pulling back on agent hiring and marketing. This compares to $644 million in GAAP opex costs in FY22 (excluding cost of revenue). The company is banking on longer average agent tenures and strong employee retention to improve its sales results. Let's discuss and put a big question mark over the revenue item first. How exactly does SelectQuote intend to grow revenue at a double-digit pace, when it is cutting its discretionary growth spending? Recent trends don't give us much confidence that a turnaround is in the works for SelectQuote. As shown in the Q4 results summary below, SelectQuote exited Q4 at a -25% y/y revenue decay clip: SelectQuote Q2 results (SelectQuote Q2 earnings deck) SelectQuote's sales and marketing efficiency metrics are also on the wane. In FY22, a typical policy approved generated only 1.8x in revenue compared to the customer acquisition cost, versus 3.0x in the year-ago quarter. Adjusted EBITDA per policy dropped to a loss of $290, versus a gain of $498 in the year-ago quarter.

Shareholder Returns

SLQTUS InsuranceUS Market
7D-15.9%-4.2%-5.2%
1Y-92.0%-2.9%-23.1%

Return vs Industry: SLQT underperformed the US Insurance industry which returned -1.3% over the past year.

Return vs Market: SLQT underperformed the US Market which returned -21.6% over the past year.

Price Volatility

Is SLQT's price volatile compared to industry and market?
SLQT volatility
SLQT Average Weekly Movement17.7%
Insurance Industry Average Movement4.2%
Market Average Movement6.9%
10% most volatile stocks in US Market15.9%
10% least volatile stocks in US Market2.8%

Stable Share Price: SLQT is more volatile than 90% of US stocks over the past 3 months, typically moving +/- 18% a week.

Volatility Over Time: SLQT's weekly volatility (18%) has been stable over the past year, but is still higher than 75% of US stocks.

About the Company

FoundedEmployeesCEOWebsite
19994,367Tim Dankerhttps://www.selectquote.com

SelectQuote, Inc. operates a technology-enabled, direct-to-consumer distribution platform that sells a range of insurance products and healthcare services in the United States. The company operates through three segments: Senior; Life; and Auto & Home. It distributes senior health policies, such as medicare advantage, medicare supplement, medicare part D, and other ancillary senior health insurance related policies, including prescription drugs, dental, vision, and hearing plans; term life policies; and non-commercial auto and home property, and casualty policies.

SelectQuote, Inc. Fundamentals Summary

How do SelectQuote's earnings and revenue compare to its market cap?
SLQT fundamental statistics
Market CapUS$174.32m
Earnings (TTM)-US$297.50m
Revenue (TTM)US$764.05m

0.2x

P/S Ratio

-0.6x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
SLQT income statement (TTM)
RevenueUS$764.05m
Cost of RevenueUS$466.81m
Gross ProfitUS$297.24m
Other ExpensesUS$594.74m
Earnings-US$297.50m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-1.81
Gross Margin38.90%
Net Profit Margin-38.94%
Debt/Equity Ratio180.4%

How did SLQT perform over the long term?

See historical performance and comparison