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Why You Should Hold eHealth (EHTH) Stock in Your Portfolio

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eHealth’s (EHTH - Free Report) solid Medicare and Individual, Family and Small Business performance and sturdy financial position along with favorable growth estimates make it worthy of retaining in one’s portfolio.

Zacks Rank & Price Performance    

eHealth currently carries a Zacks Rank #3 (Hold). In the past month, the stock has gained 8.3% against the industry’s decrease of 1.3%. The Finance sector and the Zacks S&P 500 composite have risen 5.9% and 3%, respectively in the said time frame.

Growth Projections

The Zacks Consensus Estimate for 2021 earnings is pegged at $5.41, indicating an upside of 29.6% from the year-ago reported figure on 28% expected increase in revenues to $842 million.

Return on Equity (ROE)

Return on equity, a measure to identify how efficiently the company is utilizing its shareholders’ fund, was 11.1% in the last reported quarter of 2020, up from 4.7% in the year-ago period.

Estimate Revision

The Zacks Consensus Estimate for 2021 moved 0.4% north in the past seven days, reflecting analyst optimism.

Earnings Surprise History

eHealth delivered earnings surprise in each of the last seven reported quarters with the average beat being 127.45%, reflecting operational excellence.

Business Tailwinds

eHealth is making continued investments in Medicare-related marketing initiatives and expansion of telesales capacity and online sales capability. This in turn will fuel growth in Medicare business. With continued momentum in the online Medicare enrollments, the private health insurance exchange service provider estimates 53% online penetration by 2024.

Substantial increase in estimated lifetime values of individual and family plan members should continue to drive Individual, Family and Small Business segment.

The company plans to ramp up its revenues at a five-year CAGR of 27% by 2024 and achieve adjusted EBITDA margin of 38%.

Debt Free Balance Sheet

The company boasts a debt free balance sheet with $197.8 million in cash, cash equivalents and marketable securities as of Sep 30, 2020.

Stocks to Consider

Some better-ranked stocks in the same space include Fidelity National Financial (FNF - Free Report) , Alleghany Corporation (Y - Free Report) and W.R. Berkley Corporation (WRB - Free Report) .    

Fidelity National delivered an earnings surprise of 18.40% in the last reported quarter. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alleghany delivered an earnings surprise of 195.85% in the last reported quarter. It sports a Zacks Rank #1.

W.R. Berkley delivered an earnings surprise of 4.84% in the last reported quarter. It carries a Zacks Rank #2 (Buy).

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