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Exploring the Driving Forces Behind eHealth's (EHTH) Q4 Earnings
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eHealth, Inc. (EHTH - Free Report) is set to report its fourth-quarter 2023 results on Feb 27, before the opening bell. It is expected to have witnessed increased Medicare Advantage members and commission revenues in the December quarter.
Earnings Surprise History
eHealth’s earnings beat the consensus estimate in one of the prior four quarters and missed on the other three occasions, with the average surprise being negative 1.1%. This is depicted in the graph below:
In the last reported quarter, the leading online health insurance marketplace reported an adjusted operating loss per share of $1.54, wider than the Zacks Consensus Estimate of a loss of 70 cents due to higher operating costs and lower enrollment volume in the Individual, Family, and Small Business segment. The negatives were partially offset by favorable member retention and better-than-expected cash collections.
eHealth’s fourth quarter results are expected to benefit from higher Medicare Part D and Small Business commission revenues. As such, the Zacks Consensus Estimate for fourth-quarter total commission revenues is pegged at almost $210 million, signaling 23.1% year-over-year growth.
The Zacks Consensus Estimate for fourth-quarter other revenues indicates a 36% increase from the year-ago period. The consensus mark for fourth-quarter overall Individual, Family and Small Business segment revenues hints at a 30% jump from the year-ago quarter.
These are likely to have positioned the company for top-line growth in the fourth quarter. The Zacks Consensus Estimate for total revenues is pegged at $244.4 million, indicating a 24.5% increase from the year-ago level.
The Individual, Family and Small Business segment is expected to have continued witnessing growth in profits in the fourth quarter. Also, in its preliminary results, EHTH said that its Medicare witnessed enrollment growth in the to-be-reported quarter. The segment’s gross margin is expected to have increased, boosting profit levels.
The company estimates Medicare Advantage members to have jumped 22% year over year in the fourth quarter. It also anticipates Total Medicare approved members to have risen 16% year over year. eHealth’s fourth quarter adjusted EBITDA is expected to be within $65-$70 million, up from the year-ago level of $49.5 million, on the back of its transformation initiatives.
The factors stated above are likely to have led to year-over-year growth in profits. The Zacks Consensus Estimate for fourth-quarter earnings per share of $1.94 suggests a 70.2% increase from the prior-year level of $1.14. The estimate remained stable over the past week.
However, the company is expected to have encountered higher operating costs and expenses due to continued growth in customer care and enrollment costs, as well as general and administrative expenses. This is likely to have affected EHTH’s profit growth levels, making an earnings beat uncertain. For full year 2023, the company expects operating cash outflow to be $7 million.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for eHealth this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company currently has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate currently stands at an earnings of $1.94 per share, in line with the Zacks Consensus Estimate.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: eHealth currently carries a Zacks Rank #3.
Here are some companies from the broader Finance space that have already reported earnings for the December quarter: Aflac Incorporated (AFL - Free Report) , Unum Group (UNM - Free Report) and Lincoln National Corporation (LNC - Free Report) .
Aflac reported fourth-quarter 2023 adjusted earnings of $1.25 per share, missing the Zacks Consensus Estimate by 15%. Higher benefits and claims, lower adjusted net investment income and declining profit levels from the U.S. businesses affected AFL’s earnings. However, improving profit levels in the Japan segment partially offset the negatives.
Unum Group’s fourth-quarter 2023 operating net income of $1.79 per share missed the Zacks Consensus Estimate by 3.8% due to higher policy benefits, commissions, interest and debt expenses and weaker performance in Unum International and Colonial Life. The negatives were partly offset by strong operations in the Unum U.S. unit.
Lincoln National reported fourth-quarter 2023 adjusted earnings of $1.45 per share, which outpaced the Zacks Consensus Estimate by 9.9% on the back of solid contributions from the Group Protection business, a strong fixed annuity business and positive flows in the Retirement Plan Services unit. However, the upside was partly offset by changes in market risk benefits.
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Exploring the Driving Forces Behind eHealth's (EHTH) Q4 Earnings
eHealth, Inc. (EHTH - Free Report) is set to report its fourth-quarter 2023 results on Feb 27, before the opening bell. It is expected to have witnessed increased Medicare Advantage members and commission revenues in the December quarter.
Earnings Surprise History
eHealth’s earnings beat the consensus estimate in one of the prior four quarters and missed on the other three occasions, with the average surprise being negative 1.1%. This is depicted in the graph below:
eHealth, Inc. Price and EPS Surprise
eHealth, Inc. price-eps-surprise | eHealth, Inc. Quote
In the last reported quarter, the leading online health insurance marketplace reported an adjusted operating loss per share of $1.54, wider than the Zacks Consensus Estimate of a loss of 70 cents due to higher operating costs and lower enrollment volume in the Individual, Family, and Small Business segment. The negatives were partially offset by favorable member retention and better-than-expected cash collections.
Now, let’s see how things have shaped up prior to the fourth-quarter earnings announcement.
Q4 Factors to Note
eHealth’s fourth quarter results are expected to benefit from higher Medicare Part D and Small Business commission revenues. As such, the Zacks Consensus Estimate for fourth-quarter total commission revenues is pegged at almost $210 million, signaling 23.1% year-over-year growth.
The Zacks Consensus Estimate for fourth-quarter other revenues indicates a 36% increase from the year-ago period. The consensus mark for fourth-quarter overall Individual, Family and Small Business segment revenues hints at a 30% jump from the year-ago quarter.
These are likely to have positioned the company for top-line growth in the fourth quarter. The Zacks Consensus Estimate for total revenues is pegged at $244.4 million, indicating a 24.5% increase from the year-ago level.
The Individual, Family and Small Business segment is expected to have continued witnessing growth in profits in the fourth quarter. Also, in its preliminary results, EHTH said that its Medicare witnessed enrollment growth in the to-be-reported quarter. The segment’s gross margin is expected to have increased, boosting profit levels.
The company estimates Medicare Advantage members to have jumped 22% year over year in the fourth quarter. It also anticipates Total Medicare approved members to have risen 16% year over year. eHealth’s fourth quarter adjusted EBITDA is expected to be within $65-$70 million, up from the year-ago level of $49.5 million, on the back of its transformation initiatives.
The factors stated above are likely to have led to year-over-year growth in profits. The Zacks Consensus Estimate for fourth-quarter earnings per share of $1.94 suggests a 70.2% increase from the prior-year level of $1.14. The estimate remained stable over the past week.
However, the company is expected to have encountered higher operating costs and expenses due to continued growth in customer care and enrollment costs, as well as general and administrative expenses. This is likely to have affected EHTH’s profit growth levels, making an earnings beat uncertain. For full year 2023, the company expects operating cash outflow to be $7 million.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for eHealth this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company currently has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate currently stands at an earnings of $1.94 per share, in line with the Zacks Consensus Estimate.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: eHealth currently carries a Zacks Rank #3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
How Other Stocks Performed
Here are some companies from the broader Finance space that have already reported earnings for the December quarter: Aflac Incorporated (AFL - Free Report) , Unum Group (UNM - Free Report) and Lincoln National Corporation (LNC - Free Report) .
Aflac reported fourth-quarter 2023 adjusted earnings of $1.25 per share, missing the Zacks Consensus Estimate by 15%. Higher benefits and claims, lower adjusted net investment income and declining profit levels from the U.S. businesses affected AFL’s earnings. However, improving profit levels in the Japan segment partially offset the negatives.
Unum Group’s fourth-quarter 2023 operating net income of $1.79 per share missed the Zacks Consensus Estimate by 3.8% due to higher policy benefits, commissions, interest and debt expenses and weaker performance in Unum International and Colonial Life. The negatives were partly offset by strong operations in the Unum U.S. unit.
Lincoln National reported fourth-quarter 2023 adjusted earnings of $1.45 per share, which outpaced the Zacks Consensus Estimate by 9.9% on the back of solid contributions from the Group Protection business, a strong fixed annuity business and positive flows in the Retirement Plan Services unit. However, the upside was partly offset by changes in market risk benefits.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.