Discusses the latest transaction and gives an update on the company highlighting Q3 results
Shares of online marketplace for health insurance, eHealth (NASDAQ:EHTH) rallied 10.75% on Monday after a Form 4 filed with the SEC revealed the groups CEO Francis Soistman had purchased a decent chunk of shares on market last week in the trading window following third quarter results. The transaction was initially spotted on Fintel’s latest CEO purchases page, over the weekend.
Q3 2022 hedge fund letters, conferences and more
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The filing revealed that Soistman purchased 80,000 shares on Tuesday the 22nd of November at $3.08 per share on average. The total transaction was worth just under $250,000 and increased Soistman’s total share count to 428,515.
The transaction comes at a time when eHealth’s shares continue to retrace from highs from the pandemic which saw the stock trade above $100. The stock is now trading below pre-pandemic levels and remains down -87% since the beginning of 2022.
This latest on market purchase was Soistman’s first acquisition of shares since last year in November 2021 where he purchased 5,500 shares at $29.19 worth around $160,000. The latest transaction signals a vote of confidence in EHTH’s stock from the CEO which has gained momentum from fresh lows.
EHTH’s CEO was not the only insider to trade during this window. Board director, Dale Wolf used the trading window to sell 5,000 shares at an average price of $3.24 on the 17th of November. The total transaction value was around $16,000.
Fintel’s insider sentiment score of 63.67 ranks EHTH in the top 6% of companies with the highest level of insider buying when screened against 14,693 other stocks.
The weight of the CEO purchase pushed the stock up the leaderboard this month.
The chart provided to the right shows the purchases and sales that have been planned and unplanned by corporate insiders of EHTH.
EHTH’s fund sentiment score of 15.43 is much weaker and ranks the company in the bottom 5% of 36,534 screened companies. The score explains the drastically weakening share price over 2022 with fund managers reducing exposure to the company. Despite the weak score, EHTH still has a total of 335 institutions on the register that own 22.95 million shares of the float.
Earlier in November, eHealth experienced a sharp 50% rise to $4 by the 9th of November following better than expected third quarter results.
eHealth’s revenue declined -16.5% over the year to $53.4 million but came in ahead of consensus forecasts by ~10% expecting around $48.5 million. Medicare sales were flat over the year but individual, family and small business segments declined -53% over the year to $8.2 million.
Underlying losses measured by adjusted EBITDA narrowed to -$33.1 million from -$55.2 million and beat analyst expectations of -$40 million. Net losses narrowed to -$47 million from -$60 million in the third quarter of 2021.
CEO Soistman excited investors with bullish commentary stating “we are pleased with our performance in the first eight weeks of the Annual Enrollment Period which to this point reflects another meaningful increase in agent productivity compared to last year”
eHealth provided full-year guidance to investors expecting sales between $375 to $395 million for the year with underlying losses of between -$45 to -$75 million. The guidance was within the market's expectations.
Analyst George Sutton from Craig-Hallum Capital was encouraged by the meaningful changes by the new management team but notes more work needs to be done. Sutton believes strong performance next quarter could be an inflection point for the business but remains cautious with a ‘hold’ rating and a $6 target price.
EHTH has a consensus ‘hold’ recommendation and a $7.20 average target price in the market.
Article by Ben Ward, Fintel
