eHealth Faces 'Volatile, Uncertain' Environment in Medicare Advantage Space, Says UBS

MT Newswires Live2024-12-05

eHealth (EHTH) is facing a "volatile and uncertain" environment related to expectations of an increased churn in the Medicare Advantage space, UBS Securities said in a Wednesday note.

"There is a significant shift in carrier behavior through a combination of plan exits, reduction of benefits, and cutting of commissions," said UBS, noting that these factors are likely to results in a substantial number of beneficiaries exiting their 2025 plans and selecting a new one.

UBS said the scenario creates an opportunity for eHealth to boost sales volume but could also "drive significantly more churn than expected," potentially pressuring cash flow and/or commissions.

On the other hand, UBS noted that eHealth has improved cash flow and core operations over the past few years, and is recently shifting away from the traditional agent model to fee-based revenue.

UBS initiated coverage on eHealth with a neutral rating and a $5.50 price target.

Price: 5.44, Change: -0.24, Percent Change: -4.14

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment