eHealth Q3 Earnings: Can NasdaqGS:EHTH Hit Its -$0.62 EPS Target?

in EARNINGS/INVESTING IDEAS by

eHealth, Inc. (NasdaqGS:EHTH) is scheduled to report Q3 earnings results on October 22, 2020.

The company is expected to report earnings of -$0.62/share on revenue of $86.926 million. The consensus earnings per share (EPS) of -$0.62/share is based on a poll of 11 analysts and represents a growth in eps of 45.0% over the same quarter last year, when the company reported earnings of -$0.43/share.

The revenue forecast of $86.926 million based on a poll of 12 analysts implies a year-over-year (YoY) growth in revenue of 24.3%. Last year the company reported $69.913 million in revenue for the quarter.

Expected to report EPS of -$0.62/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $86.93 $69.91 24.3%
EPS -$0.62 -$0.43 45.0%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarters.

What are your expectations from eHealth, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.15 $0.07 147.3% Beat
Q1, 2020 $0.22 $0.39 78.8% Beat
Q4, 2019 $2.50 $4.13 65.2% Beat
Q3, 2019 -$0.63 -$0.43 31.9% Beat
Q2, 2019 -$0.33 $0.10 129.9% Beat
Q1, 2019 -$0.12 $0.33 382.8% Beat
Q4, 2018 $1.98 $1.61 −18.7% Missed
Q3, 2018 -$0.42 -$0.22 48.2% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −31.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 23, 2020 $114.86 $79.17 −31.1% Decline
April 23, 2020 $118.88 $109.31 −8.1% Decline
February 20, 2020 $132.25 $131.52 −0.6% Decline
October 24, 2019 $60.04 $60.17 0.2% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −1.01, the model suggests that the company is likely an earnings manipulator. A value of −1.01 implies a 15.6% chance of earnings manipulation.

Fundamentals And Technical Analysis

eHealth, Inc. is currently trading at $82.69/share, up 1.1% for the day. The company is trading at approximately 54.3% of its 52-week high of $152.19/share. The company’s stock price is up 4.4% since the last earnings report and up 0.7% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 58.34 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:EHTH Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 27.34 and a forward P/E multiple of 19.10.

eHealth, Inc.’s current share price also implies a price-to-book (P/B) multiple of 2.69. The following table summarizes some other key fundamental ratios:

Data as of October 20, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $82.69
P/E Ratio 27.3x
P/E Ratio (Fwd) 19.1x
PEG Ratio 0.0
Total Debt / Total Capital 2.4%
Levered Free Cash Flow -$92.634 million
EV / EBITDA 18.4x

Finbox

eHealth, Inc. is a mid-cap stock with a market capitalization of $2.129 billion and a total enterprise value of $1.969 billion. The company operates in the Financials sector and the Insurance industry.

eHealth, Inc. provides private health insurance exchange services to individuals, families, and small businesses in the United States and China. The company operates through two segments, Medicare; and Individual, Family and Small Business. Its ecommerce platforms organize and present health insurance information in various formats that enable individuals, families, and small businesses to research, analyze, compare, and purchase a range of health insurance plans. The company’s Medicare-related health insurance plans include medicare advantage, medicare supplement, and medicare part D prescription drug plans; and ancillary products, including dental, vision, life, and short and long term disability insurance plans. It markets health insurance plans through its websites, such as eHealth.com, eHealthInsurance.com, eHealthMedicare.com, Medicare.com, PlanPrescriber.com, and GoMedigap.com, as well as through a network of marketing partners. The company also licenses its health insurance ecommerce technology that enables health insurance carriers and agents to market and distribute health insurance plans online; and provides online sponsorship and advertising services. eHealth, Inc. was incorporated in 1997 and is headquartered in Santa Clara, California.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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