GoHealth, Inc. (GOCO) Stock Forecast & Price Target

GoHealth Inc. has demonstrated strong financial performance with a 40.2% year-over-year increase in total submissions, reaching 303,000, which exceeded prior estimates and was primarily driven by a significant 64% growth in captive Medicare submissions despite only a 24% growth in agent headcount. The company's 1Q25 revenue also reflected a robust 19.1% year-over-year growth, totaling $221 million, surpassing both estimates and consensus predictions. Additionally, the stabilization of membership persistency and lifetime value (LTV) over the past two years indicates a favorable trend in customer retention and overall financial health within the industry.

GoHealth Inc. experienced a significant decline in revenue per sale, decreasing by 15.4% to $724, primarily attributed to a shift in the business mix from non-agency to agency submissions, which may affect profitability. While the company reported a notable year-over-year improvement in adjusted EBITDA for 1Q25 at $42.1 million, exceeding estimates, the rising challenges related to persistency headwinds could lead to negative tail revenues and a reduction in cash flow from commissions. Furthermore, the analysis indicates a potential downside valuation of $3, reflecting anticipated adjusted EBITDA approximately 25% lower than base estimates, alongside a significant adjustment to the company's earnings multiple.