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Why Shares of SelectQuote Are Falling Today

By Bram Berkowitz – May 12, 2021 at 11:53AM

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The insurance platform just posted earnings results that missed the consensus estimate.

What happened

Shares of the insurance platform SelectQuote (SLQT 8.25%) traded nearly 20% lower as of 11 a.m. today after the company reported earnings results for its most recent quarter.

So what

The company, which provides a platform that assists consumers in purchasing senior health, life, auto, and home insurance policies from a curated panel of insurance carriers, reported net income of nearly $36.5 million on total revenues of nearly $267 million for the three months ended March 31.

Net income is up nearly 54% from the three months ended March 31, 2020, while total revenues are up roughly 80% year over year.

Man watching red line move downward.

Image source: Getty Images.

However, earnings missed the average estimate by analysts, although revenue did beat by $4.35 million. Traders also do not seem to be impressed with the company; they acquired a large amount of put options earlier this week, which is essentially a bet that the stock will move downward or stay down for a set period of time.

Now what

Since going public earlier last year, SelectQuote has gained very little traction, with its stock trading down since the initial pop on the day it listed.

The company also just revised its net income range downward for the full year this quarter, although it wasn't a big revision, and management said it is simply doing so to further invest in new products.

Based on earnings results, expanded product capabilities, and growing addressable markets, the company, in my opinion, looks well positioned.

Bram Berkowitz 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.
SLQT
$0.81 (8.25%) $0.06

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