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eHealth (EHTH) Q4 Earnings Miss on Higher Operating Costs
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eHealth, Inc. (EHTH - Free Report) reported a fourth-quarter 2023 adjusted earnings of $1.61 per share, missing the Zacks Consensus Estimate by 17%. The bottom line, however, jumped from the prior-year quarter’s earnings of $1.14 per share.
The top line increased 26% year over year to $247.7 million. The figure beat the consensus mark by 1.3%.
The lower-than-expected earnings were caused by higher operating costs and expenses and weaker performance in Employer and Individual businesses. The negatives were partially offset by higher commissions and total approved members.
eHealth reported commissions of $218.5 million for the quarter, up 28% year over year. It beat the Zacks Consensus Estimate by 4.1%. Other revenues jumped 13% from the prior-year period to $29.2 million, missing the consensus mark by 16.7%.
The total operating costs and expenses increased 14% year over year to $188.3 million in the fourth quarter. Higher marketing and advertising, cost of revenues, customer care and enrollment and general and administrative costs were partially offset by lower technology and content expenses.
Net income improved 152% year over year to $52.2 million in the fourth quarter. Adjusted EBITDA was $69.6 million in the quarter under review, showing an improvement of 41% from a year ago. Adjusted EBITDA margin was at 28%, up from 25% a year ago.
Segmental Update
Medicare: Revenues from the segment jumped 30% year over year to $233.7 million. Segmental profit improved 51% year over year to $80.3 million. The segment was supported by increased commissions and higher Medicare Advantage plan approved members, which rose 22% from the year-ago period.
Employer and Individual: In the fourth quarter, the company changed the segment’s name from Individual, Family and Small Business. Revenues from the segment fell 12% year over year to $14 million. Segmental profit fell 22% year over year to $7.1 million. The segment was hurt by decreased individual and family, small business and ancillary product approved members.
Financial Update (as of Dec 31, 2023)
eHealth exited the fourth quarter with cash and cash equivalents of $115.7 million, which fell from the 2022-end level of $144.4 million. Total assets of $1.1 billion at 2023 end remained in line with the year-ago period level.
Long-term debt was $67.8 million at the fourth-quarter end, up from $66.1 million at 2022-end.
Total shareholders’ equity of $606 million decreased from the 2022-end level of $651 million.
Operating cash outflow in the fourth quarter of 2023 was recorded at $33.4 million, wider than $18.6 million in the year-ago period.
2024 View
eHealth expects revenues to be in the range of $450-$475 million compared with the 2023 level of $452.9 million. It expects net loss to be within the $40-$20 million band in 2024 compared with a net loss of $28.2 million in 2023.
The company anticipates adjusted EBITDA to be within a loss of $5 million and a profit of $20 million. It reported a 2023 adjusted EBITDA of $14.1 million. EHTH expects operating cash outflow for 2024 to be within $15-$5 million, compared with $6.7 million in 2023.
The Zacks Consensus Estimate for Ryan Specialty’s 2024 full-year earnings indicates a 23.9% year-over-year increase. It beat earnings estimates in two of the past four quarters and met twice, with an average surprise of 5.1%. Also, the consensus mark for RYAN’s 2024 full-year revenues suggests 18.8% year-over-year growth.
The consensus mark for Chubb’s 2024 full-year earnings is pegged at $21.23 per share, which witnessed eight upward estimates in the past month against no movement in the opposite direction. It beat earnings estimates in each of the past four quarters, with an average surprise of 23.4%. Furthermore, the consensus estimate for CB’s 2024 full-year revenues suggests 7.4% year-over-year growth.
The Zacks Consensus Estimate for Brown & Brown’s 2024 full-year earnings is pegged at $3.20 per share, which indicates 13.9% year-over-year growth. The estimate remained stable over the past week. BRO beat earnings estimates in each of the past four quarters, with an average surprise of 11.2%.
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eHealth (EHTH) Q4 Earnings Miss on Higher Operating Costs
eHealth, Inc. (EHTH - Free Report) reported a fourth-quarter 2023 adjusted earnings of $1.61 per share, missing the Zacks Consensus Estimate by 17%. The bottom line, however, jumped from the prior-year quarter’s earnings of $1.14 per share.
The top line increased 26% year over year to $247.7 million. The figure beat the consensus mark by 1.3%.
The lower-than-expected earnings were caused by higher operating costs and expenses and weaker performance in Employer and Individual businesses. The negatives were partially offset by higher commissions and total approved members.
eHealth, Inc. Price, Consensus and EPS Surprise
eHealth, Inc. price-consensus-eps-surprise-chart | eHealth, Inc. Quote
Operational Update
eHealth reported commissions of $218.5 million for the quarter, up 28% year over year. It beat the Zacks Consensus Estimate by 4.1%. Other revenues jumped 13% from the prior-year period to $29.2 million, missing the consensus mark by 16.7%.
The total operating costs and expenses increased 14% year over year to $188.3 million in the fourth quarter. Higher marketing and advertising, cost of revenues, customer care and enrollment and general and administrative costs were partially offset by lower technology and content expenses.
Net income improved 152% year over year to $52.2 million in the fourth quarter. Adjusted EBITDA was $69.6 million in the quarter under review, showing an improvement of 41% from a year ago. Adjusted EBITDA margin was at 28%, up from 25% a year ago.
Segmental Update
Medicare: Revenues from the segment jumped 30% year over year to $233.7 million. Segmental profit improved 51% year over year to $80.3 million. The segment was supported by increased commissions and higher Medicare Advantage plan approved members, which rose 22% from the year-ago period.
Employer and Individual: In the fourth quarter, the company changed the segment’s name from Individual, Family and Small Business. Revenues from the segment fell 12% year over year to $14 million. Segmental profit fell 22% year over year to $7.1 million. The segment was hurt by decreased individual and family, small business and ancillary product approved members.
Financial Update (as of Dec 31, 2023)
eHealth exited the fourth quarter with cash and cash equivalents of $115.7 million, which fell from the 2022-end level of $144.4 million. Total assets of $1.1 billion at 2023 end remained in line with the year-ago period level.
Long-term debt was $67.8 million at the fourth-quarter end, up from $66.1 million at 2022-end.
Total shareholders’ equity of $606 million decreased from the 2022-end level of $651 million.
Operating cash outflow in the fourth quarter of 2023 was recorded at $33.4 million, wider than $18.6 million in the year-ago period.
2024 View
eHealth expects revenues to be in the range of $450-$475 million compared with the 2023 level of $452.9 million. It expects net loss to be within the $40-$20 million band in 2024 compared with a net loss of $28.2 million in 2023.
The company anticipates adjusted EBITDA to be within a loss of $5 million and a profit of $20 million. It reported a 2023 adjusted EBITDA of $14.1 million. EHTH expects operating cash outflow for 2024 to be within $15-$5 million, compared with $6.7 million in 2023.
Zacks Rank Stocks to Consider
eHealth currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Finance space are Ryan Specialty Holdings, Inc. (RYAN - Free Report) , Chubb Limited (CB - Free Report) and Brown & Brown, Inc. (BRO - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Ryan Specialty’s 2024 full-year earnings indicates a 23.9% year-over-year increase. It beat earnings estimates in two of the past four quarters and met twice, with an average surprise of 5.1%. Also, the consensus mark for RYAN’s 2024 full-year revenues suggests 18.8% year-over-year growth.
The consensus mark for Chubb’s 2024 full-year earnings is pegged at $21.23 per share, which witnessed eight upward estimates in the past month against no movement in the opposite direction. It beat earnings estimates in each of the past four quarters, with an average surprise of 23.4%. Furthermore, the consensus estimate for CB’s 2024 full-year revenues suggests 7.4% year-over-year growth.
The Zacks Consensus Estimate for Brown & Brown’s 2024 full-year earnings is pegged at $3.20 per share, which indicates 13.9% year-over-year growth. The estimate remained stable over the past week. BRO beat earnings estimates in each of the past four quarters, with an average surprise of 11.2%.