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eHealth (EHTH) Moves 5.8% Higher: Will This Strength Last?

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eHealth (EHTH - Free Report) shares ended the last trading session 5.8% higher at $41.16. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 1.3% loss over the past four weeks.

eHealth continues to witness strong momentum in Medicare Advantage enrollment growth. The insurer has made significant progress toward expanding and enhancing the telesales organization which is expected to drive the Medicare business.

An increase in Medicare plan-approved members, owing to growth in Medicare Advantage plan members, higher Medicare Supplement plan members, strong consumer demand, online enrollment growth, and an increase in internal agent productivity during the Medicare Advantage open enrollment period are expected to drive revenues for the Medicare segment, going forward.

A combination of strong enrollments and a continuing increase in the persistency of the existing book of business is likely to benefit the Individual, Family and Small Business segment’s revenues and profit growth. The tailwinds have aided eHealth in maintaining a sustainable revenue growth trend over the past few years.

This provider of internet-based heath insurance agency services is expected to post quarterly loss of $0.66 per share in its upcoming report, which represents a year-over-year change of -83.3%. Revenues are expected to be $92.52 million, down 1.9% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For eHealth, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on EHTH going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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