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eHealth (EHTH) Q4 Earnings and Revenues Beat Estimates

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eHealth (EHTH - Free Report) reported fourth-quarter 2020 adjusted net earnings of $2.32 per share, which beat the Zacks Consensus Estimate by 4.5%. The bottom line rebounded from the year-ago loss of 36 cents.

Fourth-quarter results reflect sturdy performance at Individual, Family and Small Business segment. However, a soft Medicare segment was a partial offset.

Operational Update

Total revenues were $293.3 million, down 2.8% year over year, primarily due to lower commission (down 10% year over year).  However, the top line beat the Zacks Consensus Estimate by 0.3%.

Revenues from the Medicare segment were $269.9 million, down 5% year over year while revenues at Individual, Family and Small Business segment increased 22% year over year to $23.4 million.

Total operating costs and expenses decreased 19.8% year over year to $213.9 million, attributed to higher marketing and advertising, customer care and enrollment and technology and content.

Adjusted EBITDA declined 41% year over year.

Medicare segment profit was $82.6 million, down 45% year over year while that of Individual, Family and Small Business segment surged 91% year over year to $15.9 million.

Approved members for all Medicare products, which include Medicare Advantage, Medicare Supplement and Medicare Part D Prescription Drug Plans, were 281,044, up 3% year over year. Approved members for Medicare Advantage products of 217,278 increased 30% year over year. Approved members for major medical individual and family plan products were 14,281 down 2% year over year.

Total estimated membership as of Dec 31, 2020 was 1,285,346, up 12% from 2019 end.

eHealth, Inc. Price, Consensus and EPS Surprise

Financial Update

Cash and cash equivalents at year-end increased 86.5% from the 2019 level to $43.8 million.

Shareholders’ equity increased 58.9% from Dec 31, 2019 to $837.6 million as of Dec 31, 2020.

Net cash used in operating activities was $107.9 million in 2020 compared with net cash used in operating activities of $71.5 million used in 2019.

2021 Guidance

Adjusted earnings per share are estimated between $2.77 and $3.26.

Total revenues are estimated between $660 million and $700 million. Revenues from the Medicare segment are estimated between $621 million and $659 million. Revenues from the Individual, Family and Small Business segment are estimated between $39 million and $41million.

Adjusted EBITDA is estimated between $100 million and $115 million.

Medicare segment profit is estimated between $138 million and $155 million. For Individual, Family and Small Business segment, profit is estimated between $18 million and $19 million.

Cash used in operations is estimated between $85 million and $95 million

Zacks Rank

Currently, eHealth carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Of the insurance industry players that have reported fourth-quarter results so far, The Travelers Companies (TRV - Free Report) , W.R. Berkley Corporation (WRB - Free Report) and Brown & Brown (BRO - Free Report) beat earnings estimates.

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