eHealth (EHTH) Gears Up for Q2 Earnings: What's in Store?

eHealth EHTH is slated to report second-quarter 2020 results on Jul 23, after market close. The company delivered earnings surprise of 95.00% in the last reported quarter.

Let’s see how things have shaped up for this announcement.

Factors to Consider

Solid revenues at Medicare segment are likely to have aided eHealth’s second-quarter performance. The company’s investments in Medicare-related marketing initiatives and expansion of telesales capacity and online sales capability are expected to have driven the performance of the Medicare segment. The Zacks Consensus Estimate for segment revenues is pegged at $69 million.

The company estimates second-quarter Medicare revenue growth of about 20% on a year-over-year basis while adjusted EBITDA loss is estimated in mid-single-digit millions, given lower costs amid lower volumes.

Nonetheless, Medicare enrollment volumes are likely to have remained soft due to seasonality. The Zacks Consensus Estimate for the number of approved members at the Medicare segment is pegged at 67,672 for the to-be-reported quarter, suggesting a decline of 20.1% from the prior quarter.

The company’s individual and family plan (IFP) business is likely to have performed well and benefited from estimated lifetime values of individual and family plan members. The company witnessed increased in IFP enrollments in March and expects the same momentum through second quarter. The company believes this to be driven by consumers losing employer coverage and turning to the individual market. The Zacks Consensus Estimate for the number of approved members at the IFP segment is pegged at 2,733.

The Zacks Consensus Estimate for second-quarter 2020 implies a decline of 290% year over year.

eHealth, Inc. Price and EPS Surprise

eHealth, Inc. price-eps-surprise | eHealth, Inc. Quote

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for eHealth this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case as you can see below.

Earnings ESP: eHealth has an Earnings ESP of -10.53%. This is because the Most Accurate Estimate of loss of 21 cents is wider than the Zacks Consensus Estimate of a loss of 19 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: eHealth currently carries a Zacks Rank of 3.

Stocks to Consider

Some insurance stocks with the right combination of elements to come up with an earnings beat this time around are:

Arthur J. Gallagher AJG has an Earnings ESP of +1.76% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Marsh McLennan MMC has an Earnings ESP of +3.95% and a Zacks Rank #3.

Cigna Corporation CI has an Earnings ESP of +2.02% and a Zacks Rank of 2.

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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 Nasdaq, Inc.