The case for & against
Bull & Bear analysis
Bearish
SelectQuote, Inc. (NYSE: SLQT) is a technology-enabled insurance brokerage that primarily focuses on Medicare Advantage, life insurance, and healthcare services. The firm has established itself as a significant player in the insurance market, leveraging data and technology to provide personalized service to its clients, particularly seniors. By connecting consumers to tailored insurance solutions, SelectQuote operates at the forefront of the aging population trend, which emphasizes healthcare and insurance services.
Bull says
- ↑Q3 revenue up 6% YoY to $431 M across all segments
- ↑Adjusted EBITDA rose 18% YoY to $45 M, boosting margins
- ↑Nearly $1 B in Medicare commissions receivable dwarfs sub-$200 M market cap
- ↑SelectQuote Local launch and Kansas facility deliver ~30% efficiency gains
- ↑Management guides FY2026 revenue to $1.61–1.71 B
- ↑High earnings yield and strong profitability factors with manageable leverage
Bear says
- ↓Consensus EPS outlook slid from ($0.03) to ($0.11), pointing to losses
- ↓PBM reimbursement change creates ~$20 M headwind to FY2026 EBITDA
- ↓High short interest and low institutional ownership signal skepticism
- ↓Negative growth momentum and declining revisions threaten earnings upside
- ↓Elevated stock volatility and analyst price-target cuts to $4.50
- ↓Regulatory reimbursement cuts and fierce competition risk margins
Investment themes with SLQT
L&H Insurance↑ +0.38%
MFC · PUK · SLF
Earnings Call · Q3 2026 · Mgmt. Guidance
Updated 05-08-2026neutral
Transcript signals
Bull points
- SelectQuote had a strong quarter with revenue growth of 6% year-over-year, totaling $431 million, driven by both our senior and healthcare services businesses, reflecting a strong OEP and continued demand for Selector X.
- The fiscal third quarter was strong operationally, and we are very well positioned to end fiscal 2026 on a positive note and carry momentum into 2027.
- Senior generated $59 million in adjusted EBITDA, including the favorable $14 million adjustment to our commission's receivable, maintaining profitability of at least 25% during the AEP and OEP seasons for each of the last four consecutive years.
Bear points
- While growth in approved policies was strong, it's important to note that approval rates this OEP were materially higher than in previous years. While we are encouraged by these strong carrier approval rates, we will continue to monitor as it's possible some of this increase may reflect approval timing and volume that was pulled forward from 4Q, contributing to the outside strength this quarter.
- The Inflation Reduction Act went into effect on January 1st of this year and set maximum fair prices for 10 higher-priced drugs, causing a notable drop in sequential revenue that was driven by that specific price change in the quarter.
- While we are encouraged by this approval rate increase, we want to continue to monitor whether some of this goodness may be timing related, impacting our fourth quarter approved policy levels.
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