Selectquote Inc

SelectQuote told investors on August 25 that cash generation, not growth, is now the entire point of owning the stock, even as fiscal 2026 revenue reached $1.62 billion, up 6% year over year, and operating cash flow climbed $44 million. The same release showed a fourth-quarter net loss of $16.8 million, a reversal from $12.9 million in net income a year earlier, and a fiscal 2027 guide pointing to revenue of $1.35 billion to $1.45 billion, roughly 14% below fiscal 2026 at the midpoint. Healthcare Services, built around the SelectRx pharmacy, generated $845 million in revenue for fiscal 2026, up 14%, and exited the fourth quarter at an annualized adjusted EBITDA run rate of nearly $50 million, roughly double the $25 million it produced across the full year. SelectQuote identified more than $30 million in annualized run rate savings from AI-enabled enrollment tools and workflow automation, while the Senior segment held a 26% adjusted EBITDA margin for a fourth straight year. The company faces $800 million in debt and preferred equity carrying a roughly 12% funding cost, translating into $45 million of annual cash interest, and expects Medicare Advantage approved policies to fall another 10% to 15% after already declining 4% this past year. Hedge fund ownership rose from 13 funds to 21 quarter over quarter, short interest sits at just 1.16% of float, and the stock trades at a forward price-to-earnings ratio of 66.67 as of September 1.

SelectQuote shares dropped 14.69% in pre-market trading on Tuesday after the company reported fourth-quarter fiscal 2026 earnings and revenue below Wall Street expectations and issued a cautious outlook for the new financial year. The company recorded an adjusted loss of $0.19 per share, wider than the $0.15 per-share loss expected by analysts, while quarterly revenue fell 7% year-on-year to $321.7 million, missing the consensus forecast of $345.29 million. SelectQuote posted a fourth-quarter net loss of $16.8 million, reversing a net profit of $12.9 million a year earlier, though adjusted EBITDA improved to $11.9 million from $2.7 million. Management expects fiscal 2027 revenue of between $1.35 billion and $1.45 billion, with the midpoint of $1.40 billion substantially below the analyst consensus estimate of $1.65 billion, and forecasts adjusted EBITDA of between $90 million and $115 million. Full-year fiscal 2026 revenue increased to $1.6 billion from $1.5 billion, and net income climbed to $62.2 million from $47.6 million.