Shares of insurance company SelectQuote (SLQT 4.16%) crashed after the company on Friday morning reported earnings for the fourth quarter of fiscal year 2024 ending June 30. The stock was down 37% at noon. SelectQuote reported a net loss of $31 million, which missed the analyst estimate by roughly 31%, according to Visible Alpha. However, keep in mind there was only one analyst with estimates.
Earnings miss the estimate
Despite the big miss on net income, revenue of $307 million in the quarter beat the estimate of nearly $275 million, although operating costs of roughly $308.6 million came in more than $21 million higher than the estimate.
SelectQuote CEO Tim Danker said in a statement:
On a consolidated basis, our fiscal year revenue and adjusted EBITDA [earnings before interest, taxes, depreciation, and amortization] outperformed the midpoint of our original forecast by 17% and 26%, respectively. This marks the 10th consecutive quarter of outperformance versus our internal expectations, reaffirming our strategy to prioritize profitability and cash efficiency over volume growth.
NYSE: SLQT
Key Data Points
SelectQuote also guided, at the midpoint, for $1.45 billion of revenue, $105 million of adjusted EBITDA, and a net loss of $24 million for fiscal year 2025. Although there is only one estimate in Visible Alpha, this comes up woefully short of the fiscal 2025 estimates, which were $1.54 billion of revenue, operating EBITDA of nearly $139 million, and a loss of $1.4 million for fiscal 2025.
Is the stock a buy right now?
SelectQuote did beat on revenue and also said that the strategic rationalization of its auto and home business will serve as a headwind to adjusted EBITDA in fiscal 2025. However, it missed big on earnings, and the disappointing guidance is also a major concern.
While I don't hate the business, the stock is down more than 91% since going public in 2020. I would need to see better execution to get interested.
