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Online health insurance comparison site eHealth (NASDAQ:EHTH) reported Q4 CY2024 results beating Wall Street’s revenue expectations , with sales up 27.3% year on year to $315.2 million. The company expects the full year’s revenue to be around $530 million, close to analysts’ estimates. Its GAAP profit of $2.51 per share was 10.8% above analysts’ consensus estimates.
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eHealth (EHTH) Q4 CY2024 Highlights:
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Revenue: $315.2 million vs analyst estimates of $282.8 million (27.3% year-on-year growth, 11.4% beat)
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EPS (GAAP): $2.51 vs analyst estimates of $2.27 (10.8% beat)
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Adjusted EBITDA: $121.3 million vs analyst estimates of $99.23 million (38.5% margin, 22.2% beat)
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Management’s revenue guidance for the upcoming financial year 2025 is $530 million at the midpoint, in line with analyst expectations and implying -0.5% growth (vs 10.6% in FY2024)
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EBITDA guidance for the upcoming financial year 2025 is $47.5 million at the midpoint, above analyst estimates of $45.08 million
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Operating Margin: 35.7%, up from 24% in the same quarter last year
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Free Cash Flow was -$30.99 million compared to -$33.47 million in the previous quarter
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Estimated Membership: 1.29 million
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Market Capitalization: $271.4 million
Company Overview
Aiming to address a high-stakes and often confusing decision, eHealth (NASDAQ:EHTH) guides consumers through health insurance enrollment and related topics.
Online Marketplace
Marketplaces have existed for centuries. Where once it was a main street in a small town or a mall in the suburbs, sellers benefitted from proximity to one another because they could draw customers by offering convenience and selection. Today, a myriad of online marketplaces fulfill that same role, aggregating large customer bases, which attracts commission-paying sellers, generating flywheel scale effects that feed back into further customer acquisition.
Sales Growth
A company’s long-term performance is an indicator of its overall quality. While any business can experience short-term success, top-performing ones enjoy sustained growth for years. Unfortunately, eHealth struggled to consistently increase demand as its $532.4 million of sales for the trailing 12 months was close to its revenue three years ago. This was below our standards and is a sign of lacking business quality.
This quarter, eHealth reported robust year-on-year revenue growth of 27.3%, and its $315.2 million of revenue topped Wall Street estimates by 11.4%.
Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. This projection doesn't excite us and suggests its newer products and services will not accelerate its top-line performance yet.