The stock market was having a generally strong day on Tuesday, with all three major averages in the green shortly after noon ET, but online insurance broker SelectQuote (SLQT -3.45%) was a major exception. As of 12:20 p.m. ET, shares were down by a staggering 49% for the day.
SelectQuote is an online insurance sales agency that sells life, auto, home, and Medicare insurance plans through its website. And as you might expect, its latest earnings report is behind today's massive plunge.
To put it mildly, SelectQuote missed analyst estimates by a mile. The insurance broker reported a steep quarterly loss of $0.84 per share (keep in mind, the company's stock price is about $3.40). It reported a 45% year-over-year revenue decline.
CEO Tim Danker blamed the shortfall on "unexpected challenges" in the company's Medicare Advantage business. Medicare Advantage makes up most of SelectQuote's senior segment, which accounts for roughly 90% of the company's revenue, so it's not difficult to see why it can be responsible for an awful quarter all by itself.
In addition, SelectQuote updated its guidance for its 2022 fiscal year (ending in June), and not in a good way. The company is forecasting a net loss of $255 million to $236 million (its market cap is little more than twice this amount), and much lower revenue than analysts were expecting.
This is just the latest in a continuing downtrend since SelectQuote went public in May 2020 for $20 per share. If the company can turn things around, the current price could end up being a tremendous bargain, but after these results, that is a big "if."