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GooseHead Insurance Inc (GSHD)
NASDAQ:GSHD
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GooseHead Insurance
(NASDAQ:GSHD)
Rating:63Neutral
Price Target:
$114.00
▲(9.38%Upside)
Positive Factors
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.
Market Position
Policies in force increased by 13%, indicating strong growth in the company's market presence.
Negative Factors
Price Objective
The significant difference between the current stock price and the price objective indicates potential downside risk.
Revenue Performance
Core revenue grew 17%, below the 19% estimate, reflecting lower-than-expected commission retention and new business productivity per producer.
Valuation
Shares are trading at a sizable premium to peers, maintaining a Market Perform rating.
GooseHead Insurance (GSHD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.91B
Dividend YieldN/A
Average Volume (3M)232.63K
Price to Earnings (P/E)86.9
Beta (1Y)0.66
Revenue Growth21.60%
EPS Growth90.80%
CountryUS
Employees1,580
SectorFinancial
Sector Strength73
IndustryInsurance - Diversified
Share Statistics
EPS (TTM)0.26
Shares Outstanding25,057,907
10 Day Avg. Volume176,474
30 Day Avg. Volume232,631
Financial Highlights & Ratios
PEG Ratio-3.07
Price to Book (P/B)67.57
Price to Sales (P/S)0.00
P/FCF Ratio31.20
Enterprise Value/Market Cap0.22
Enterprise Value/Revenue0.71
Enterprise Value/Gross Profit5.85
Enterprise Value/Ebitda3.68
Forecast
1Y Price Target
$116.11Price Target Upside11.41% 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 commissions earned on the sale of insurance policies. The company partners with a variety of insurance carriers and receives a percentage of the premium of each policy sold as a commission. Goosehead's revenue model is supported by its dual-distribution platform, consisting of corporate sales agents and franchisees. The corporate agents contribute to revenue through direct sales, while the franchise network expands the company's reach and contributes to revenue through royalties and franchise fees. This model allows Goosehead to scale efficiently by leveraging the entrepreneurial efforts of franchise owners, while maintaining a focus on client service and leveraging technology to enhance operational efficiency. Significant partnerships with major insurance carriers provide Goosehead with a broad portfolio of products to offer clients, contributing to its revenue growth and market presence.
GooseHead Insurance Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q4-2024)
| % Change Since: -1.59%|
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.Q4-2024 Updates
Positive Updates
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.
Negative Updates
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 Financial Statement Overview
Summary
GooseHead Insurance reports strong revenue growth and solid operational efficiency with a robust EBIT margin and cash flow generation. However, the balance sheet presents risks with negative equity and high financial leverage, requiring attention for long-term stability.Income Statement
GooseHead Insurance demonstrates strong revenue growth with a revenue increase from $209.39M in 2022 to $325.63M in TTM (Trailing-Twelve-Months), indicating robust business expansion. The gross profit margin has improved to 44.97% in TTM. However, the net profit margin remains modest at 9.51%, suggesting room for efficiency improvements. The EBIT margin is 20.36%, showing operational profitability. Overall, the income statement reflects a healthy growth trajectory and solid operational performance, although net profitability could be enhanced.85
Very Positive
Balance Sheet
The balance sheet shows a high debt-to-equity ratio due to negative stockholders' equity of -$88.54M in TTM, indicating potential solvency risk. Return on equity is not meaningful due to negative equity. Despite substantial total assets of $412.56M, the equity ratio is unfavorable. The financial leverage poses a risk, although the company has managed to maintain cash reserves. Improvement in equity health is necessary for long-term stability.45
Neutral
Cash Flow
GooseHead Insurance has a strong operating cash flow of $75.17M in TTM, surpassing net income and indicating good cash generation capability. The free cash flow increased to $65.18M, showing a healthy cash position after capital expenditures. The operating cash flow to net income ratio is 2.43, highlighting efficient cash conversion. The cash flow statement reflects good liquidity, though careful management of financing activities is advised to maintain cash reserves.78
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 325.63M | 314.50M | 261.28M | 209.39M | 151.31M | 117.01M | Gross Profit |
| 146.48M | 141.56M | 108.67M | 76.10M | 58.27M | 50.20M | EBIT |
| 66.30M | 61.14M | 32.96M | 8.29M | -64.40M | -36.14M | EBITDA |
| 75.66M | 64.99M | 45.83M | 17.01M | 13.55M | 23.09M | Net Income Common Stockholders |
| 30.95M | 30.43M | 14.14M | 2.63M | 8.30M | 18.75M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 70.21M | 54.28M | 41.96M | 28.74M | 28.53M | 24.91M | Total Assets |
| 412.56M | 397.65M | 354.89M | 321.35M | 267.80M | 185.84M | Total Debt |
| 352.35M | 153.38M | 143.22M | 165.16M | 174.96M | 119.04M | Net Debt |
| 282.14M | 99.11M | 101.26M | 136.42M | 146.44M | 94.13M | Total Liabilities |
| 558.07M | 358.58M | 338.11M | 354.98M | 336.99M | 224.24M | Stockholders Equity |
| -88.54M | 43.89M | 56.55M | 10.67M | -14.21M | -4.88M |
| Cash Flow | Free Cash Flow | ||||
| 65.18M | 70.56M | 38.60M | 23.11M | 20.04M | 14.28M | Operating Cash Flow |
| 75.17M | 71.54M | 50.76M | 35.72M | 35.44M | 24.64M | Investing Cash Flow |
| -12.85M | -12.42M | -19.18M | -12.57M | -15.38M | -10.33M | Financing Cash Flow |
| -42.86M | -45.20M | -17.92M | -23.25M | -15.83M | -3.33M |
GooseHead Insurance Technical Analysis
Negative
104.22
Price Trends
106.39
Negative
110.16
Negative
104.05
Positive
Market Momentum
0.15
Positive
42.10
Neutral
16.23
Positive
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 104.22 is below the 20-day moving average (MA) of 109.31, below the 50-day MA of 106.39, and above the 200-day MA of 104.05, indicating a neutral trend. The MACD of 0.15 indicates Positive momentum. The RSI at 42.10 is Neutral, neither overbought nor oversold. The STOCH value of 16.23 is Positive, 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 (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $35.58B | 12.48 | 18.49% | 1.66% | 7.55% | 14.16% | |
79 Outperform | $1.04B | 8.50 | 20.50% | 7.89% | 13.29% | 17.14% | |
77 Outperform | $5.00B | 10.72 | 8.56% | ― | 10.70% | -39.16% | |
73 Outperform | $17.02B | 16.27 | 9.70% | 4.00% | 5.84% | -10.64% | |
69 Neutral | $1.77B | 17.57 | -0.42% | 2.47% | 23.28% | -103.35% | |
64 Neutral | $12.77B | 9.71 | 7.85% | 78.06% | 12.07% | -7.97% | |
63 Neutral | $3.91B | 86.89 | 60.58% | ― | 21.60% | 90.80% |
* Financial Sector Average
Performance Comparison
GSHD
GooseHead Insurance
104.22
49.09
89.04%
ESGR
Enstar Group
335.42
26.50
8.58%
HIG
Hartford Financial
125.23
25.67
25.78%
PFG
Principal Financial
75.90
0.80
1.07%
IGIC
International General Insurance Holdings
23.14
9.29
67.08%
FIHL
Fidelis Insurance Holdings Ltd.
16.22
0.54
3.44%
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.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.