In response to the company posting expectation-topping fourth-quarter results, shares of Health Insurance Innovations (NASDAQ:BFYT), a provider of short-term health insurance plans, rose as much as 17% in early-morning trading on Thursday. Shares have since pulled back but were still up about 10% as of 10:25 a.m. EST.
Here's a review of the headline numbers from the quarter:
- Revenue grew 35% to $69.5 million. That result far exceeded the $59.2 million in quarterly revenue that Wall Street was looking for.
- Net income grew 257% to $5.0 million.
- Non-GAAP earnings per share (EPS) grew 6% to $0.37. That was better than the $0.34 that analysts were expecting.
Turning to guidance, management predicts that revenue in 2018 will land between $290 million and $300 million, while earnings will come in between $2.45 to $2.55 per share. The midpoint of this guidance is far better than the $274 million in revenue and $1.92 in earnings that Wall Street was projecting.
Given the solid quarterly results and bullish guidance, it isn't hard to figure out why shareholders are having a good day.
Health Insurance Innovations' stock has rebounded strongly from the beating that it took in the fall when short-sellers started to raise questions about its business model. However, the company has since made a lot of progress to address their concerns, which has contributed to the soaring share price.
Do today's results suggest that shareholders are finally in the clear? That's tough to say, as a multistate investigation into whether or not the company's insurance plans are compliant with Obamacare remains ongoing. Personally, that represents more risk than I like to take on, so I'm happy to root for this company's success from the sidelines.