Shares of SelectQuote tumble after its latest earnings report

Insurance company shares Select Quotes (SLQT -37.74%) fell after the company reported earnings for the fourth quarter of the 2024 fiscal year ending June 30 on Friday morning. Shares were down 37% at midday. SelectQuote reported a net loss of $31 million, which missed analyst estimates by about 31 percent, according to Visible Alpha. However, note that there was only one analyst with estimates.

Earnings are not estimated

Despite the big loss in net income, revenue of $307 million in the quarter beat the estimate of nearly $275 million, although operating costs of about $308.6 million were more than $21 million higher than the estimate.

SelectQuote CEO Tim Danker said in a statement:

On a consolidated basis, fiscal year revenue and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) exceeded the midpoint of our original forecast by 17% and 26%, respectively. This marks the 10th consecutive quarter of outperforming our internal expectations, reaffirming our strategy of prioritizing profitability and cash efficiency over volume growth.

SelectQuote also led the midpoint for revenue of $1.45 billion, adjusted EBITDA of $105 million and a net loss of $24 million for fiscal 2025. Although there is only one estimate in Visible Alpha , this is terribly below the fiscal level. Estimates for 2025, which were revenue of $1.54 billion, operating EBITDA of nearly $139 million, and a loss of $1.4 million for fiscal 2025.

Is the stock a buy right now?

SelectQuote beat on revenue and also said the strategic streamlining of its auto and home businesses will serve as a headwind to adjusted EBITDA in fiscal 2025. However, it missed by a lot on earnings, and the disappointing guidance is also a major concern.

While I don’t hate the business, the stock is down over 91% since going public in 2020. I would need to see better execution to be interested.