SelectQuote (SLQT) AI Stock Analysis

• Market Cap: $568.08M
• Dividend Yield: N/A
• Average Volume (3M): 1.25M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.55
• Revenue Growth: 25.67%
• EPS Growth: 72.08%
• Country: US
• Employees: 4,292
• Sector: Financial
• Sector Strength: 82
• Industry: Insurance - Brokers
• EPS (TTM): -0.09
• Shares Outstanding: 172,144,290
• 10 Day Avg. Volume: 1,652,446
• 30 Day Avg. Volume: 1,250,376
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.45
• Price to Cash Flow (P/CF): -5.70
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $7.00
• Price Target Upside: 118.07% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

SelectQuote's overall stock score is supported by strong revenue growth and strategic capital investments, but is hindered by ongoing profitability challenges and technical weaknesses. The company's raised guidance and improved operational metrics are promising, yet valuation concerns and negative momentum impact the score.

SelectQuote Business Overview & Revenue Model

Company Description

SelectQuote, Inc. is a financial services company that specializes in providing a platform for consumers to compare and purchase insurance products. Founded in 1985, the company operates in the insurance sector, offering a range of services primarily focused on life, auto, and home insurance. SelectQuote partners with various insurance carriers to provide a marketplace where customers can compare quotes and select the best insurance products that fit their needs.

How the Company Makes Money

SelectQuote makes money primarily through the commissions it receives from insurance carriers when consumers purchase insurance policies via its platform. The company operates as a brokerage, facilitating the connection between consumers and insurance providers. It earns revenue by charging these carriers a commission on every policy sold. Additionally, SelectQuote may generate income through lead generation fees from insurance carriers and fees for providing additional services, such as policy management and consulting. Key factors contributing to its earnings include the volume of insurance policies sold, the diversity of its insurance carrier partnerships, and the effectiveness of its marketing strategies in attracting consumers to its platform.

SelectQuote Financial Statement Overview

Summary

SelectQuote demonstrates strong revenue growth and improving operational margins, yet faces challenges with net profitability and equity returns. The balance sheet is stable but shows signs of increasing leverage. The positive shift in cash flow is a favorable development, though further improvements in cash efficiency are needed.

Income Statement

SelectQuote's income statement shows a steady revenue growth trend over the recent periods, with a noticeable increase from $764 million in 2022 to $1.46 billion in the TTM (Trailing-Twelve-Months). The gross profit margin is healthy, reaching approximately 53.9% in the TTM. However, the company is struggling with profitability at the net level, as indicated by a negative net profit margin of -0.95% in the TTM, though it shows improvement from previous years. The EBIT and EBITDA margins are positive, signaling operational efficiency improvement.

Balance Sheet

The balance sheet reflects a moderate financial position with a debt-to-equity ratio of 0.17 in the TTM, indicating manageable leverage. The equity ratio stands at 25.5%, which is reasonable but shows a declining trend from previous years, suggesting increasing liabilities. Return on equity is negative due to net losses, highlighting a challenge in generating returns for shareholders.

Cash Flow

SelectQuote's cash flow statement reveals a positive operating cash flow in the TTM, signaling improvement from prior periods. Free cash flow has also turned positive, indicating better cash management. However, the free cash flow to net income ratio suggests inefficiency as the company is not yet converting its earnings into cash effectively.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
1.46B	1.32B	1.00B	764.04M	937.82M	531.51M
	Gross Profit
784.87M	597.97M	475.36M	297.24M	667.10M	364.12M
	EBIT
93.96M	64.55M	11.58M	-301.41M	200.07M	132.33M
	EBITDA
108.05M	89.48M	29.91M	-320.65M	204.26M	139.92M
	Net Income Common Stockholders
-13.78M	-34.13M	-58.54M	-297.50M	124.86M	79.48M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
12.10M	42.69M	83.16M	141.00M	286.45M	321.06M
	Total Assets
1.28B	1.19B	1.22B	1.29B	1.43B	1.07B
	Total Debt
56.10M	713.92M	731.58M	744.80M	502.72M	311.81M
	Net Debt
43.99M	671.23M	648.42M	603.80M	216.27M	-9.25M
	Total Liabilities
953.16M	877.11M	872.28M	898.95M	758.98M	528.10M
	Stockholders Equity
326.00M	316.80M	346.97M	391.11M	674.89M	545.69M
Cash Flow		Free Cash Flow
11.94M	3.57M	-28.50M	-372.96M	-138.43M	-77.33M
	Operating Cash Flow
18.40M	15.24M	-19.38M	-338.31M	-115.44M	-61.78M
	Investing Cash Flow
-14.00M	-14.85M	-9.13M	-42.58M	-64.02M	-51.37M
	Financing Cash Flow
-1.61M	-40.86M	-29.34M	235.43M	97.04M	481.45M

SelectQuote Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.21
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 3.21 is below the 20-day moving average (MA) of 3.27, below the 50-day MA of 3.92, and below the 200-day MA of 3.33, indicating a bearish trend. The MACD of -0.18 indicates Negative momentum. The RSI at 44.40 is Neutral, neither overbought nor oversold. The STOCH value of 37.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SLQT.

SelectQuote Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WRLD	79 Outperform	$737.87M	9.17	19.28%	―	-2.78%	24.39%
UVSP	73 Outperform	$815.24M	10.88	8.93%	2.95%	7.17%	12.20%
DGICA	72 Outperform	$655.05M	12.19	13.11%	3.70%	5.29%	1200.44%
Sector *	63 Neutral	$12.06B	9.31	8.10%	79.51%	12.80%	-4.67%
SLQT	61 Neutral	$568.08M	―	-4.16%	―	25.67%	72.08%
TREE	56 Neutral	$596.28M	―	-35.80%	―	33.86%	66.85%
LDI	48 Neutral	$367.68M	―	-31.41%	―	3.76%	16.19%

SelectQuote Corporate Events

SelectQuote Secures $350 Million Investment from NL Monarch

On February 28, 2025, SelectQuote, Inc. completed the sale of 350,000 shares of Senior Non-Convertible Preferred Stock and 30,833,333 warrants to purchase common stock to NL Monarch Holdings LLC and NL Monarch Holdings II LLC, marking a significant $350 million investment. This transaction is expected to impact SelectQuote’s financial structure and operations, with implications for stakeholders, including changes in board composition and potential adjustments in dividend rates based on company liquidity and financial performance.

SelectQuote Secures $350 Million Investment to Boost Liquidity

On February 10, 2025, SelectQuote, Inc. entered into Senior Preferred Stock Purchase Agreements with Morgan Stanley and Bain, resulting in a $350 million investment in the company. This investment aims to improve SelectQuote’s liquidity and operating flexibility, particularly in its Senior and Healthcare Services segments. The transaction includes the issuance of preferred stock and warrants. Additionally, the company reported strong financial results for the second quarter of fiscal year 2025, with increased revenue and net income compared to the previous year, driven by strong performance in its Senior and Healthcare Services segments.