Shares of eHealth (EHTH 1.94%) climbed by more than 20% on Wednesday, following the results of the Super Tuesday primary elections.
Many health insurance stocks saw their prices sink in recent weeks after Democratic presidential candidate Bernie Sanders emerged as a frontrunner in the primaries. Sanders wants to institute a "Medicare For All" program, which would provide everyone in the U.S. with comprehensive healthcare coverage. Sanders' policies could potentially wipe out a huge portion of private insurers' businesses, as well as those of health insurance exchanges, such as eHealth.
However, investors appeared to breathe a sigh of relief after former Vice President Joe Biden's strong performance on Super Tuesday. Biden now leads in delegates after winning in states such as Texas, Virginia, and Massachusetts. A Biden victory would be much less frightening for health insurance-related companies, as his policies are far less threatening to the industry.
If investors can eventually turn their attention away from politics and toward eHealth's fundamental business performance, they'll probably like what they see. eHealth delivered strong fourth-quarter results in late February, including a 124% year over year surge in revenue, to $301.7 million, and an increase in net income to $88.8 million. "We ended the year on a strong note, delivering the best annual enrollment period in the company's history and generating financial results that significantly exceeded our 2019 annual guidance across multiple metrics," CEO Scott Flanders said in eHealth's earnings release.
Moreover, Flanders expects eHealth's growth to remain robust in the coming year. "[W]e anticipate the momentum we have built over the past two years to continue into 2020," Flanders said.