GoHealth Posts Mixed Q2 Results; Shares Drop 6.7%

Shares of GoHealth, Inc. (GOCO) plunged 6.7% in Thursday’s pre-market trade due to a wider-than-expected loss reported by the company in the second quarter of 2021. GoHealth is a health insurance marketplace and a Medicare-focused digital health company.

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The company reported a loss of $0.12 per share, which was wider than the Street’s loss estimate of $0.04. Net revenues soared 55% year-over-year to $196.9 million and surpassed the consensus mark of $175.1 billion.

The top line was supported by a 52.7% year-over-year growth in commissions, along with a 62.2% increase in enterprise revenues. Notably, total medicare commissionable submitted policies in Q2 grew 52% to 156,559.

Segment-wise, Medicare–Internal revenues comprised 81.5% of the total revenues and increased 84% on a year-over-year basis. Also, Q2 MA LTV per approved submission of $953 increased 5% compared to the year-ago period. (See GoHealth stock charts on TipRanks)

The Co-founder and CEO of GoHealth, Clint Jones, said, “While we are encouraged by the growth in our agent force, enhanced training and tight labor markets have created cost pressures that we expect to continue over the balance of the year.”

For full-year 2021, the company has tightened its revenue outlook to $1.2 billion to $1.3 billion on the back of commission net revenue of $1 billion to $1.1 billion as agent growth is tracking at the high end of expectations.

Also, GoHealth lowered expectations for adjusted EBITDA to $300 million to $330 million, reflecting 11-22% increase, primarily due to higher agent costs anticipated in 2021.

Following the release, Evercore ISI analyst Elizabeth Anderson downgraded the rating on GoHealth to a Hold with a price target of $9 (upside potential of 9.8%).

Anderson is of the opinion that the company’s economics have deteriorated materially and that a broader lack of visibility into the company’s outlook is a concern.

Based on 2 Buys and 3 Holds, the stock has a Moderate Buy consensus. The average GoHealth price target of $15.25 implies 86% upside potential from current levels.

TipRanks’ Stock Investors tool shows that investors currently have a Very Negative stance on GoHealth, with 4.6% of investors on TipRanks decreasing their exposure to GOCO stock over the past 30 days.