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SelectQuote (SLQT)
NYSE:SLQT
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SelectQuote
(NYSE:SLQT)
Select Model
Select Model
Rating:56Neutral
Price Target:
$0.81
▲(2.53% Upside)
Action:ReiteratedDate:03/04/26
The score is driven primarily by improving fundamentals (profitability recovery and meaningfully reduced leverage) and a constructive earnings outlook centered on higher expected operating cash flow, but it is capped by weak technicals (price well below key moving averages with negative momentum) and inconsistent cash flow conversion, with valuation metrics offering limited support due to a negative P/E and no dividend.
Positive Factors
De-risked balance sheet
Material deleveraging and a larger equity base reduce liquidity and refinancing risk, giving management durable flexibility. Lower leverage and positive ROE support capacity to fund peak-season working capital, strategic initiatives, and covenants over the next several years without immediate capital raises.
High-margin senior business
Consistently strong senior margins reflect structural competitive advantages: scale, carrier relationships, and agent productivity. High senior profitability provides a durable cash and earnings anchor that can absorb volatility in other lines and supports long-term margin targets.
SelectRx growth and clinical outcomes
Rapid SelectRx expansion and demonstrable clinical impact create a differentiated value proposition for carriers and members. Recurring pharmacy revenue and measurable cost savings can deepen carrier partnerships and diversify commissions, supporting steadier long-term cash generation and competitive moat.
Negative Factors
Inconsistent cash generation
Volatile cash conversion weakens financial resilience: accounting profits have not reliably converted to cash, complicating investment planning and making the firm more sensitive to seasonal working capital swings, covenant tests, and unexpected carrier payment or reimbursement shifts.
Thin consolidated profitability
Low margins leave little buffer for adverse shocks. Given dependence on carrier commissions and reimbursement dynamics, a modest adverse move in pricing, marketing spend, or policy mix could erase profits, making margin durability and structural cost advantages key risks to sustained earnings.
Concentrated carrier & regulatory risk
Significant one-time and ongoing carrier decisions plus CMS rate uncertainty show product and partner concentration risk. Large marketing pullbacks or reimbursement changes can quickly reduce approved enrollments and commissions, creating persistent revenue volatility and planning uncertainty.
SelectQuote (SLQT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$152.09M
Dividend YieldN/A
Average Volume (3M)1.49M
Price to Earnings (P/E)―
Beta (1Y)1.30
Revenue Growth13.16%
EPS GrowthN/A
CountryUS
Employees4,292
SectorFinancial
Sector Strength70
IndustryInsurance - Brokers
Share Statistics
EPS (TTM)0.26
Shares Outstanding176,289,660
10 Day Avg. Volume1,092,297
30 Day Avg. Volume1,486,684
Financial Highlights & Ratios
PEG Ratio-0.05
Price to Book (P/B)0.73
Price to Sales (P/S)0.27
P/FCF Ratio-30.25
Enterprise Value/Market Cap3.77
Enterprise Value/Revenue0.35
Enterprise Value/Gross Profit0.51
Enterprise Value/Ebitda3.52
Forecast
1Y Price Target
$4.00Price Target Upside406.33% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)-0.12
Revenue Forecast (FY)$1.67B
SelectQuote Business Overview & Revenue Model
Company DescriptionSelectQuote, Inc. operates a technology-enabled, direct-to-consumer distribution platform that sells a range of insurance policies to consumers from various insurance carriers in the United States. The company operates through three segments: Senior; Life; and Auto & Home. It distributes senior health policies, such as medicare advantage, medicare supplement, medicare part D, and other ancillary senior health insurance related policies, including prescription drugs, dental, vision, and hearing plans; term life policies; and non-commercial auto and home property, and casualty policies. The company was incorporated in 1999 and is headquartered in Overland Park, Kansas.
How the Company Makes MoneySelectQuote generates revenue primarily through commissions earned on the sale of insurance policies. The company partners with numerous insurance carriers, receiving a commission for each policy sold through its platform. This commission-based model allows SelectQuote to monetize its extensive customer base effectively. Additionally, the company may earn referral fees for directing customers to specific insurance providers. SelectQuote's focus on providing a transparent and user-friendly experience attracts a wide audience, contributing to its revenue growth. The company also invests in marketing and technology to enhance its services and expand its reach within the insurance marketplace.
SelectQuote Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call described strong operational execution: double‑digit consolidated revenue growth, near‑record senior margins (39%), rapid SelectRx revenue growth (26% YoY) and measurable clinical outcomes (20% fewer hospital days). Management secured a multiyear PBM agreement and a $415M credit facility that materially improves visibility and capital flexibility. However, the quarter and fiscal 2026 guidance were meaningfully impacted by two discrete headwinds (~$20M PBM reimbursement adjustment and ~$20M from a national carrier marketing cut), prompting a revised adjusted EBITDA range of $90–$100M and signaling near‑term uncertainty from industry disruption and preliminary CMS rate guidance. Overall the operational and cash flow improvements and strategic balance sheet actions outweigh the near‑term, largely one‑time headwinds, leaving management optimistic about long‑term profitability and cash generation.Q2-2026 Updates
Positive Updates
Consolidated Revenue Growth
Consolidated revenue grew 12% year-over-year to $537 million in the quarter.
Senior Segment Profitability and Volume
Senior revenue was $262 million, up 2% YoY; approved policy volume growth of 4%; senior adjusted EBITDA was $102 million and senior EBITDA margin was a near‑record 39% (fourth consecutive AEP season >30%).
Agent Productivity and Retention
Agent retention remained north of 90%; productivity per agent was 12% higher than two years ago despite a higher mix of new hires.
Marketing Efficiency
Marketing cost per approved policy was $326, in line with last year and ~20% lower versus 02/2024, contributing to strong marketing efficiency.
Health Care Services (SelectRx) Rapid Growth
SelectRx members grew 17% YoY to 113,000 and revenue grew 26% YoY to $231 million as onboarding members matured and consumed full prescriptions.
Clinical Outcomes and Operational Impact of SelectRx
SelectRx pharmacists identified nearly 50,000 potential dosage or adverse interaction concerns in 2025, leading to tens of thousands of prescription changes and an observed 20% reduction in beneficiary hospital days tied to improved medication adherence.
Improved Capital Flexibility
Closed a new $415 million credit facility in January that extends debt maturities to 2031, increases peak season liquidity, and provides optionality to lower interest cost (up to 100 bps) and fund strategic initiatives.
PBM Multiyear Agreement
Entered a multiyear PBM agreement that materially improves visibility into drug reimbursement pricing, supporting SelectRx profitability and predictability moving forward.
Cash Flow Improvement
Management expects operating cash flow of $25 million to $35 million for fiscal 2026 (midpoint stated as >$40 million higher than last year) and forecasts ~20% increase in cash EBITDA for 2026 versus prior year.
Life Insurance Performance
Life revenue grew 9% to $44 million; final expense premiums increased 24% YoY; Life adjusted EBITDA was $6 million, continuing to deliver attractive returns and cash flow.
Negative Updates
Guidance Reduced Due to Aggregate $40M Headwind
Fiscal 2026 guidance was lowered: consolidated revenue range revised to $1.61–$1.71 billion and adjusted EBITDA to $90–$100 million after an aggregate ~$40 million impact (approximately $20 million from PBM reimbursement changes and ~$20 million from a national carrier reducing marketing spend).
Quarterly EBITDA Temporarily Depressed by PBM Reimbursement Headwind
Healthcare services EBITDA was temporarily depressed by the PBM reimbursement change disclosed last quarter; management calls this a fiscal 2026 one‑time headwind (~$20M).
National Carrier Marketing Pullback
A major national carrier significantly cut strategic marketing budgets across third-party distribution, creating an estimated ~$20 million FY2026 impact to SelectQuote and introducing near‑term revenue risk from that partner.
Industry Disruption and Plan Terminations
Carriers terminated ~7% of plans in each of the past two seasons (vs historical <1%), and the majority of beneficiaries experienced a negative impact on at least one plan benefit, contributing to elevated market volatility and shopping behavior.
Health Care Services Membership Outlook Moderation
Management expects SelectRx membership to end fiscal 2026 flat to modestly down from the current 113,000 as the company prioritizes cash flow and profitability over enrollment growth.
Life Segment Margin Pressure
Life adjusted EBITDA was down modestly YoY (total $6M) due to modest marketing expense pressure and increased competition within the Term Life business.
Regulatory / Rate Uncertainty
CMS 2027 advanced rate notice preliminary rates were softer than expected; management highlighted industry concern and uncertainty until the final rate notice in April.
Company Guidance
SelectQuote narrowed fiscal 2026 guidance to consolidated revenue of $1.61–$1.71 billion and adjusted EBITDA of $90–$100 million after an aggregate ~ $40 million headwind (about $20M from PBM reimbursement changes and $20M from a carrier marketing cut); management still expects operating cash flow of $25–$35 million (more than $40M higher at the midpoint versus last year) and roughly 20% growth in cash EBITDA year‑over‑year. They reiterated longer‑term targets of 20%+ EBITDA margins for the senior division and an annualized adjusted EBITDA exit run‑rate of $40–$50 million for health care services, expect SelectRx membership to finish fiscal 2026 flat to modestly down from 113,000 while driving 20%+ year‑over‑year revenue growth, and cited a new $415 million credit facility that extends maturities to 2031 and could reduce the term rate by up to 100 basis points.SelectQuote Financial Statement Overview
Summary
Financials show a recovery to profitability and a substantially de-risked balance sheet (debt-to-equity ~0.14x; positive ROE), but profitability remains thin (TTM net margin ~3.7%) and cash flow conversion has been inconsistent with prior negative periods, keeping the overall financial profile only moderately strong.Income Statement
Results show a clear earnings recovery from sizable losses in 2022–2024 to profitability in 2025, alongside steady top-line expansion (TTM (Trailing-Twelve-Months) revenue up 3.6%). Profitability is still relatively thin on a TTM (Trailing-Twelve-Months) basis (net margin ~3.7% and EBIT margin ~3.1%), well below the stronger profile seen in 2021, indicating the turnaround is real but not yet fully re-established. Overall, improving trajectory is a positive, but margin durability remains a key watch item.62
Positive
Balance Sheet
Leverage has improved materially: debt-to-equity moved from very elevated levels in 2023–2024 (above 2x) to a much more conservative position in the TTM (Trailing-Twelve-Months) data (debt-to-equity ~0.14x), implying significantly reduced balance-sheet risk. Equity is sizable relative to assets (TTM equity of ~$620M vs. assets of ~$1.35B), and returns on equity are positive again (TTM ~11.7%) after negative levels in prior years. The main drawback is the recent history of volatility in profitability and capital structure, even though the latest snapshot is much healthier.78
Positive
Cash Flow
Cash generation is currently modest: TTM (Trailing-Twelve-Months) operating cash flow (~$12M) and free cash flow (~$8M) are positive, but the business has shown inconsistency with negative operating and free cash flow in 2023 and again in 2025 annual data. Free cash flow growth is sharply negative in the TTM (Trailing-Twelve-Months) period, and operating cash flow is low relative to revenue, signaling that accounting profitability is not consistently translating into cash. Strength is the return to positive free cash flow in the latest period, but volatility and weak cash conversion keep this vertical below average.45
Neutral
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.62B | 1.53B | 1.32B | 1.00B | 764.04M | 929.98M |
| Gross Profit | 1.13B | 591.13M | 597.97M | 475.36M | 308.35M | 659.27M |
| EBITDA | 163.08M | 148.36M | 89.48M | 39.34M | -321.49M | 203.48M |
| Net Income | 77.72M | 47.58M | -34.13M | -58.54M | -297.50M | 124.86M |
Balance Sheet | ||||||
| Total Assets | 1.35B | 1.25B | 1.19B | 1.22B | 1.29B | 1.42B |
| Cash, Cash Equivalents and Short-Term Investments | 22.20M | 32.40M | 42.69M | 83.16M | 141.00M | 286.45M |
| Total Debt | 457.83M | 415.91M | 713.92M | 731.80M | 745.06M | 505.30M |
| Total Liabilities | 732.62M | 673.84M | 877.11M | 872.28M | 898.95M | 756.82M |
| Stockholders Equity | 619.64M | 575.52M | 316.80M | 346.97M | 391.11M | 667.04M |
Cash Flow | ||||||
| Free Cash Flow | 8.47M | -13.86M | 3.57M | -28.50M | -372.96M | -138.43M |
| Operating Cash Flow | 12.07M | -11.67M | 15.24M | -19.38M | -338.31M | -115.44M |
| Investing Cash Flow | -14.10M | -11.31M | -14.85M | -9.13M | -42.58M | -64.02M |
| Financing Cash Flow | 11.74M | 17.36M | -40.86M | -29.34M | 235.43M | 97.04M |
SelectQuote Technical Analysis
Negative
0.79
Price Trends
1.27
Negative
1.49
Negative
1.82
Negative
Market Momentum
-0.13
Negative
34.02
Neutral
58.20
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SLQT, the sentiment is Negative. The current price of 0.79 is below the 20-day moving average (MA) of 0.98, below the 50-day MA of 1.27, and below the 200-day MA of 1.82, indicating a bearish trend. The MACD of -0.13 indicates Negative momentum. The RSI at 34.02 is Neutral, neither overbought nor oversold. The STOCH value of 58.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SLQT.
SelectQuote Risk Analysis
SelectQuote disclosed 54 risk factors in its most recent earnings report. SelectQuote reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
SelectQuote Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
56 Neutral | $152.09M | -13.10 | 16.44% | ― | 13.16% | ― | |
53 Neutral | $38.53M | -2.70 | 4.22% | ― | 16.79% | ― | |
46 Neutral | $20.11M | 7.99 | 4.56% | ― | 19.30% | -17.56% | |
44 Neutral | $21.73M | -0.08 | -142.05% | ― | 7.56% | -344.04% | |
43 Neutral | $4.72M | -0.01 | -11.18% | ― | 624.24% | 85.46% |
* Financial Sector Average
SLQT
SelectQuote
0.79
-3.23
-80.45%
EHTH
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1.56
-7.03
-81.84%
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1.89
-1.59
-45.69%
TIRX
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0.06
-7.46
-99.22%
GOCO
GoHealth
1.54
-14.13
-90.17%
SelectQuote Corporate Events
Business Operations and StrategyPrivate Placements and Financing
SelectQuote secures new $415 million credit facility
Positive
Jan 12, 2026
On January 8, 2026, SelectQuote entered into a new $415 million senior secured credit facility consisting of a $325 million term loan led by Pathlight Capital and a $90 million revolving credit facility with UMB Bank, using roughly $313.8 million of the term loan proceeds to fully repay its prior debt and cover transaction costs. Announced publicly on January 12, 2026, the financing significantly extends the company’s debt maturity to January 2031, modestly lowers its cost of capital, increases peak-season revolver capacity from $72 million to $90 million, and reduces principal amortization requirements, collectively strengthening liquidity and operational flexibility as the company looks to leverage its roughly $1 billion in commissions receivable and the growing cash generation of its SelectRx and healthcare services operations, while its obligations remain secured by substantially all company and guarantor subsidiary assets and subject to customary covenants, coverage ratios, and borrowing-base tests tied to receivables.
The most recent analyst rating on (SLQT) stock is a Hold with a $1.50 price target. To see the full list of analyst forecasts on SelectQuote stock, see the SLQT Stock Forecast page.
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.