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Here's Why SelectQuote Stock Is Soaring on Thursday

By Matthew Frankel, CFP® – Sep 10, 2020 at 11:39AM

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The insurance technology company is one of the market's best performers.

What happened

The stock market was having a so-so day on Thursday, with the Dow Jones, S&P 500, and Nasdaq all slightly in the red at 11 a.m. EDT. Insurance distribution platform provider SelectQuote (SLQT -8.69%) is another story, with shares soaring by 16% on the day.

So what

Why? The short answer is that SelectQuote reported earnings that blew past expectations. The company's revenue grew by 90% year over year to $141 million, which was nearly $22 million more than analysts had been looking for. And it earned $0.13 per share for the quarter, well in excess of what the market had been expecting.

Man smiling while using laptop.

Image source: Getty Images.

Perhaps even more important, SelectQuote issued guidance for its 2021 fiscal year for revenue in the range of $775 million to $815 million, and even the low end of this range exceeds previous expectations.

Now what

SelectQuote could be just starting to scratch the surface of the long-term potential of its direct-to-consumer insurance sales platform. The company is a recent IPO and has captured less than a 1% share of its total $180 billion addressable market opportunity in all three of its core markets -- seniors, life insurance, and auto and home insurance. At a valuation of about eight times trailing-12-month sales, SelectQuote isn't exactly a cheap stock, but it could still be a good value if it can manage to keep its impressive growth story alive.

Matthew Frankel, CFP has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

SelectQuote, Inc. Stock Quote
SelectQuote, Inc.
$0.73 (-8.69%) $0.07

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