GoHealth posted mixed performance in the third quarter of 2024 amid market pressure from Investing.com

GoHealth, Inc. (GOCO) announced mixed financial results in its third quarter 2024 earnings conference call led by CEO Vijay Kotte and CFO Brendan Shanahan. The company’s net sales fell to $118.3 million, compared to $132 million a year ago.

Despite a significant increase in submissions from internal sales agents, a suspicion of submissions from the GPS channel and a cyberattack on Change Healthcare negatively impacted results.

The acquisition of e-TeleQuote strengthens GoHealth’s balance sheet and agent capacity, and the company is optimistic about its growth opportunities through 2025.

Key Takeaways:

– Net sales decreased to $118.3 million from $132 million in the third quarter of 2023.

– Submissions from internal sales agents increased by 46%, while submissions from the GPS channel decreased by the same percentage.

– A cyberattack on Change Healthcare resulted in an estimated loss of over $8.8 million in revenue.

– Calculated EBITDA was negative $12.1 million.

– The acquisition of e-TeleQuote gave GoHealth $90.5 million in contract assets, $22.5 million in cash and nearly 400 licensed agents.

– Direct operating costs per submission decreased by 11%.

– Positive operating cash flow of $35.1 million for the trailing 12 months.

– Debt repayment prioritized with $75 million repaid in 2024.

– Refinanced term loan facility to $475 million due 2029.

Company outlook:

– GoHealth expects favorable market dynamics and growth opportunities through 2025.

– The company plans to invest in growth initiatives given favorable market conditions.

– Optimism regarding the upcoming enrollment period and demand for expanded services and proprietary solutions.

Bearish Highlights:

– The company recorded a year-over-year decline in net sales.

– A cyberattack significantly impacted enrollment and financial performance.

– Filings from the GPS channel fell 46%, indicating market pressure.

Bullish Highlights:

– The acquisition of e-TeleQuote is expected to improve operational capacity and market positioning.

– GoHealth reported a sharp increase in internal sales agent submissions.

– Improved financing conditions through refinancing and focus on operational efficiency.

Mistakes:

– Despite growth in some areas, overall net sales decreased compared to the previous year.

– Adjusted EBITDA remained negative despite direct operating costs improving.

Highlights of the question and answer session:

– Management discussed the strategic focus on expanding the consumer base for Medicare Advantage.

– The importance of operational efficiency and capital deployment to improve cash flow was emphasized.

– Future opportunities could include leveraging GoHealth’s technology for potential industry consolidation.

– The company’s approach will adapt to market stability and consumer needs, with an emphasis on offering the best products.

In summary, GoHealth’s recent earnings call presented a picture of resilience and strategic planning in the face of market challenges.

The Company’s acquisition of e-TeleQuote and focus on operational efficiency and capital management signal a commitment to growth and adaptability in the evolving healthcare landscape.

With a positive outlook for the annual enrollment period and beyond, GoHealth aims to continue to effectively serve the Medicare population and expand its consumer-centered engagement model.

InvestingPro Insights:

GoHealth’s most recent earnings call paints a picture of a company overcoming challenges while positioning itself for future growth. InvestingPro data and tips provide additional context on the company’s financial situation and market performance.

According to the latest data, GoHealth’s market capitalization is $272.81 million, reflecting the current market valuation. The company’s revenue for the trailing twelve months through Q3 2024 was $686.46 Million, with a notable sales growth of 30.17% during the same period. This growth is consistent with the company’s optimistic outlook and expected market opportunities through 2025.

However, it is important to note that GoHealth is not currently profitable, as evidenced by its negative price-to-earnings ratio of -4.44 for the last two years

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