eHealth - Momentum

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eHealth, Inc. ( EHTH ) has put together three straight quarters of positive EPS surprises, and will have a chance to do it again when it reports third-quarter results next week. Shares of this Internet-based health insurance provider have been enjoying a favorable run of late, and even hit a 52-week high of $20.36 on October 8. This Zacks #2 Rank (Buy) also announced a new share repurchase program in September.

Upcoming 3Q Release

eHealth is scheduled to report its third quarter results on October 25. The Zacks Consensus Estimate is calling for a loss of 1 cent on expected revenue of $37 million.

On September 10, eHealth's board of directors approved a new share repurchase program, authorizing the company to buy back shares worth $30 million.

On July 26, eHealth reported second-quarter 2012 operating earnings per share of 10 cents, beating the Zacks Consensus Estimate by 100%. It was also way above the year-ago result of 1 cent. Total revenue dropped 2% year over year to $35.5 million, though it exceeded the Zacks Consensus Estimate by 4%.

Commission revenue improved 2% while Medicare revenue shot up 130%. Total approved members in the second quarter increased 19% year over year. Total operating costs and expenses slipped 0.1% year over year to $31.3 million.

Guidance and Earnings Estimates Revisions

eHealth projects total revenue between $152 million and $158 million for 2012. Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) is expected at $21 million to $26 million. The company sees adjusted earnings for 2012 at 56 cents to 66 cents per share.

For 2012, the Zacks Consensus Estimate is currently pegged at 36 cents, an increase of 16.1% over the last 90 days. The Zacks Consensus Estimate for 2013 rose 11.9% to 47 cents over the same time frame, representing a year-over-year increase of 31.2%.

Market Performance & Technicals

Following the announcement of the share buyback program, the company's shares moved above its 50-day moving average as well as the 200-day moving average. Also, shares have increased approximately 17.3% since eHealth released its second quarter results.

Volume is strong, averaging roughly 138,700 daily. The year-to-date return for the stock came in at 36.7%, compared to the Nasdaq's return of 17.1%.

eHealth Inc. is a leading online based provider of health insurance for individuals, families and small businesses in the United States. It has a market capitalization of $396.65 million.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks

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