Earlier today, SelectQuote disclosed its earnings for the fourth quarter of the fiscal year 2024, which concluded on June 30.
Shares of the insurance company SelectQuote (SLQT) plummeted following the announcement. By noon, the stock had declined by 37%, largely due to the company’s reported net loss of $31 million, which fell short of analyst expectations by approximately 31%, as reported by Visible Alpha. Notably, this comparison was based on estimates from a single analyst.
In terms of financial performance, SelectQuote experienced a significant shortfall in net income. However, it did report quarterly revenue of $307 million, surpassing the estimated $275 million. On the other hand, operating costs amounted to around $308.6 million, exceeding forecasts by more than $21 million.
CEO Tim Danker commented on the company’s performance, stating, “On a consolidated basis, our fiscal year revenue and adjusted EBITDA 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.”
Looking ahead to fiscal year 2025, SelectQuote has projected, at the midpoint, $1.45 billion in revenue, $105 million in adjusted EBITDA, and a net loss of $24 million. These projections fall short in comparison to Visible Alpha’s estimates, which had forecasted $1.54 billion in revenue, nearly $139 million in operating EBITDA, and a net loss of $1.4 million for the same period.
Despite the positive note on surpassing revenue estimates and the strategic adjustments in their auto and home business expected to impact adjusted EBITDA in fiscal 2025, the substantial miss on earnings and the disconcerting future guidance pose significant concerns for the company.
Since its initial public offering in 2020, SelectQuote’s stock has seen a decline of over 91%. The current business climate necessitates improved execution for renewed investor interest.
Bram Berkowitz, author of the original report, has no holdings in any of the mentioned stocks. The Motley Fool also holds no positions in the mentioned stocks and adheres to a comprehensive disclosure policy.
