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GooseHead Insurance Inc (GSHD)
NASDAQ:GSHD
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GooseHead Insurance
(NASDAQ:GSHD)
71Outperform
Positive Factors
Business Model
Goosehead is positioned to drive high levels of growth due to its superior business model compared to peers and a focus on offering customers a better experience with significant choice.
Earnings
The company's operating EPS slightly exceeded estimates and street consensus, providing a minor positive surprise.
Growth Opportunities
There is a strong pipeline of potential growth opportunities, including improving agency efficiency and a digital quote-to-bind initiative gaining traction.
Negative Factors
Growth Targets
Premium growth was below the forecast and decreased from the previous quarter, suggesting potential headwinds in achieving long-term growth targets.
Revenue
Total revenue and core revenue growth came in below forecasts, indicating challenges in meeting expectations.
Stock Valuation
The significant difference between the current stock price and the price objective indicates potential downside risk.
GooseHead Insurance (GSHD) vs. S&P 500 (SPY)
Market Cap
$3.49B
Dividend YieldN/A
Average Volume (3M)249.56K
Price to Earnings (P/E)77.7
Beta (1Y)0.66
Revenue Growth21.60%
EPS Growth90.80%
CountryUS
Employees1,580
SectorFinancial
Sector Strength81
IndustryInsurance - Diversified
Share Statistics
EPS (TTM)1.20
Shares Outstanding24,973,720
10 Day Avg. Volume224,311
30 Day Avg. Volume249,556
Financial Highlights & Ratios
PEG Ratio0.86
Price to Book (P/B)N/A
Price to Sales (P/S)13.82
Price to Cash Flow (P/CF)86.90
P/FCF Ratio86.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$113.67Price Target Upside21.98% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
GooseHead Insurance Business Overview & Revenue Model
Company DescriptionGoosehead Insurance, Inc. operates as a holding company for Goosehead Financial, LLC that provides personal lines insurance agency services in the United States. The company operates in two segments, Corporate Channel and Franchise Channel. It offers homeowner's, insurance, automotive, dwelling property insurance, flood, wind, earthquake, excess liability or umbrella, motorcycle, recreational vehicle, general liability, property, and life insurance products and services. As of December 31, 2021, the company had 2,151 total franchises. Goosehead Insurance, Inc. was founded in 2003 and is headquartered in Westlake, Texas.
How the Company Makes MoneyGoosehead Insurance makes money primarily through the commission-based revenue model. The company earns commissions from insurance carriers for the policies sold through its network of corporate and franchise agents. The franchise model involves franchisees that independently own and operate their agencies, paying a percentage of the commissions they earn to Goosehead as franchise fees. This structure allows Goosehead to scale efficiently, broaden its market reach, and provide clients with a wide array of insurance options from various carriers. Additionally, the company benefits from renewal commissions as existing policies are renewed, contributing to a steady and recurring revenue stream. Strategic partnerships with leading insurance carriers further enhance its product offerings and competitiveness in the marketplace.
GooseHead Insurance Financial Statement Overview
Summary
GooseHead Insurance demonstrates strong financial performance with robust revenue growth and profitability metrics. However, a relatively low equity base is a concern despite improved debt management.Income Statement
GooseHead Insurance demonstrates strong revenue growth, with a steady increase over the last five years, most notably from $77.5M in 2019 to $314.5M in 2024. Gross profit margin has strengthened, indicating improved efficiency in managing costs relative to revenue. Net profit margin improved significantly from 1.24% in 2020 to 9.67% in 2024, showcasing enhanced profitability. The EBIT margin improved substantially from negative figures in earlier years to 19.44% in 2024, reflecting better operational management. Overall, consistent revenue growth and improved profitability metrics highlight robust financial health.85
Very Positive
Balance Sheet
The balance sheet indicates a reduction in debt levels, with total debt decreasing from $143.2M in 2023 to $61.1M in 2024. The debt-to-equity ratio has improved due to the rise in stockholders' equity from $10.67M in 2022 to $43.89M in 2024. However, equity remains relatively low, affecting the equity ratio negatively, which poses a potential risk. The company has seen a positive trend in return on equity, escalating to 69.31% in 2024, reflecting effective use of equity for profit generation.70
Positive
Cash Flow
Operating cash flow has shown consistent growth, with a notable increase from $24.6M in 2020 to $71.5M in 2024, indicating strong cash generation from operations. Free cash flow has also escalated, demonstrating robust financial flexibility. The free cash flow to net income ratio is healthy, suggesting sufficient cash flow relative to net income. However, the cash flow from financing activities has been consistently negative, indicating potential concerns in funding strategies.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 314.50M | 261.28M | 209.39M | 151.31M | 117.01M | Gross Profit |
| 141.56M | 108.67M | 76.10M | 58.27M | 50.20M | EBIT |
| 61.14M | 32.96M | 8.29M | -64.40M | -36.14M | EBITDA |
| 49.81M | 45.83M | 17.01M | 13.55M | 23.09M | Net Income Common Stockholders |
| 30.43M | 14.14M | 2.63M | 8.30M | 18.75M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 54.28M | 41.96M | 28.74M | 28.53M | 24.91M | Total Assets |
| 397.65M | 354.89M | 321.35M | 267.80M | 185.84M | Total Debt |
| 61.07M | 143.22M | 165.16M | 174.96M | 119.04M | Net Debt |
| 6.79M | 101.26M | 136.42M | 146.44M | 94.13M | Total Liabilities |
| 358.58M | 338.11M | 354.98M | 336.99M | 224.24M | Stockholders Equity |
| 43.89M | 56.55M | 10.67M | -14.21M | -4.88M |
| Cash Flow | Free Cash Flow | |||
| 70.56M | 38.60M | 23.11M | 20.04M | 14.28M | Operating Cash Flow |
| 71.54M | 50.76M | 35.72M | 35.44M | 24.64M | Investing Cash Flow |
| -12.42M | -19.18M | -12.57M | -15.38M | -10.33M | Financing Cash Flow |
| -45.20M | -17.92M | -23.25M | -15.83M | -3.33M |
GooseHead Insurance Technical Analysis
Negative
93.19
Price Trends
114.12
Negative
110.21
Negative
98.29
Negative
Market Momentum
-3.95
Positive
33.45
Neutral
43.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GSHD, the sentiment is Negative. The current price of 93.19 is below the 20-day moving average (MA) of 110.32, below the 50-day MA of 114.12, and below the 200-day MA of 98.29, indicating a bearish trend. The MACD of -3.95 indicates Positive momentum. The RSI at 33.45 is Neutral, neither overbought nor oversold. The STOCH value of 43.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GSHD.
GooseHead Insurance Risk Analysis
GooseHead Insurance disclosed 54 risk factors in its most recent earnings report. GooseHead Insurance reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
GooseHead Insurance Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $34.03B | 11.52 | 19.58% | 1.66% | 8.19% | 29.77% | |
77 Outperform | $4.97B | 9.27 | 9.91% | ― | -15.68% | -47.11% | |
75 Outperform | $1.10B | 8.21 | 22.41% | 0.35% | 13.29% | 17.14% | |
71 Outperform | $3.49B | 77.71 | 60.58% | ― | 21.60% | 90.80% | |
70 Outperform | $1.84B | 16.75 | 4.63% | 2.42% | -32.79% | -94.89% | |
67 Neutral | $16.87B | 11.23 | 14.28% | 3.93% | 18.02% | 171.70% | |
63 Neutral | $12.33B | 9.59 | 8.02% | 79.26% | 12.87% | -4.61% |
* Financial Sector Average
Performance Comparison
GSHD
GooseHead Insurance
93.19
42.88
85.23%
ESGR
Enstar Group
333.70
43.51
14.99%
HIG
Hartford Financial
119.24
21.84
22.42%
PFG
Principal Financial
75.00
-3.26
-4.17%
IGIC
International General Insurance Holdings
24.87
11.68
88.55%
FIHL
Fidelis Insurance Holdings Ltd.
16.47
-2.81
-14.57%
GooseHead Insurance Earnings Call Summary
Earnings Call Date: Apr 23, 2025 | % Change Since: -12.00% | Next Earnings Date: Jul 23, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Goosehead Insurance's strong financial performance, significant growth in franchise and corporate divisions, and advancements in technology and partnerships. However, challenges were noted in the Texas and admitted markets, client retention rates, and the impact of catastrophic loss trends on contingent commissions. The company remains optimistic about its growth trajectory and strategic initiatives for 2025.Highlights
Outstanding Financial Performance
Goosehead Insurance delivered a remarkable 2024 with 20% total revenue growth, 17% core revenue growth, 29% premium growth, and EBITDA near $100 million, up 43% year-over-year with a record margin of 32%.
Franchise Growth and Productivity
Franchise productivity grew 47% year-over-year in the fourth quarter and 49% for the full year. The franchise producer count increased by 7%, with producers per franchise up 19% from one year ago.
Corporate and Enterprise Expansion
The corporate agent count increased by 39%, and the enterprise sales team, which focuses on digital and partnership lead channels, is the fastest-growing division.
Technological Advancements
Goosehead Insurance expanded its quote-to-issue platform, launched a new mobile app, and invested in AI tools to enhance service and sales capabilities.
Strong Cash Flow and Financial Position
Operating cash generation for the year was $71.5 million, up 41%, while free cash flow of $59.4 million increased 53% for the year.
Strategic Partnerships and Market Expansion
Goosehead Insurance launched an embedded franchise with a national bank, and the pipeline for similar partnerships is large and growing.
Lowlights
Challenges in Texas and Admitted Market
Texas, a key market, has been challenging due to tight product markets and high year-over-year price increases. The admitted market remains tight, impacting commission rates.
Client Retention Concerns
Client retention has been stable at 84% for three consecutive quarters, down from a historical high of 89%, with uncertainty about the pace of recovery.
Dependence on Catastrophic Loss Trends
The company's contingent commissions are influenced by catastrophic loss trends, which remain uncertain for 2025.
Company Guidance
In the fourth quarter of 2024 earnings call, Goosehead Insurance, Inc. provided guidance for 2025 with a focus on strategic growth and market adaptation. The company anticipates total revenues to range between $350 million and $385 million, reflecting an organic growth rate of 11% to 22%. Premiums are expected to grow between $4.65 billion and $4.88 billion, indicating a 22% to 28% increase. The guidance assumes a gradual decline in pricing tailwinds and conservative client retention levels. Goosehead plans to expand its franchise distribution and increase its producer headcount, with franchise productivity having grown 47% year-over-year in Q4 2024. The company also highlighted the potential for technological advancements, such as the Goosehead mobile app and quote-to-issue technology, to facilitate growth and improve client service. Additionally, Goosehead intends to leverage AI for enhanced client interaction and policy recommendations. Despite challenges in the insurance market, the company remains optimistic about its strategic initiatives and the potential for sustained growth in 2025.GooseHead Insurance Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
GooseHead Insurance Appoints Bill Wade to Board
Positive
Apr 17, 2025
On April 16, 2025, Goosehead Insurance appointed Bill Wade to its Board of Directors. Wade, a former senior partner at Bain & Company with over 25 years of experience, is recognized for his expertise in leveraging AI and emerging technologies to drive innovation and growth. His appointment is seen as a strategic move to bolster Goosehead’s technology-driven expansion in the insurance industry, aiming to enhance client experiences and solidify its leadership position.
Spark’s Take on GSHD Stock
According to Spark, TipRanks’ AI Analyst, GSHD is a Outperform.
GooseHead Insurance presents a solid investment opportunity with strong financial performance and technical momentum. Strategic growth initiatives and technological advancements highlight future potential. However, high valuation metrics and challenges in key markets and client retention pose risks.
To see Spark’s full report on GSHD stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.