What happened
Shares of Goosehead Insurance (GSHD 0.35%) traded roughly 8.5% higher as of 11:01 a.m. ET today after the insurer reported earnings results for the first quarter of the year.
So what
Goosehead, which offers various insurance products such as homeowners and automobile coverage, broke even in the quarter on total revenue of nearly $58 million, beating analyst estimates.
CEO Mark E. Jones issued a statement saying: "Premiums were up 41% for the quarter, driven by new business, client retention of 88%, and ongoing carrier rate increases. We also saw continued significant improvement in our agent productivity levels driven by culling of underperforming agents and improvements in management, recruiting and operating functions."
Management also raised its full-year outlook and now expects total written premiums to come in between $2.86 billion and $2.99 billion, which would imply organic growth between 29% and 35%. Total revenue is expected to land between $260 million and $267 million, good for organic growth between 24% and 28%.
And the company expects the margin on adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to expand in 2023. It came in at 18% for the full year of 2022.
Now what
Goosehead delivered a solid beat-and-raise in the quarter, and it looks like the company will be able to sustain that momentum. Management has been improving the recruitment process for frachisees and expects to grow franchises by 150 to 200 per year, so I think the company is well positioned.
