Wednesday, July 16, 2025
Patrick McCann, CFA, Research Analyst, Noble Capital Markets, Inc.
Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Setting up fiscal 2026. We are adjusting our fiscal Q4 estimates to reflect updated expectations for the Medicare Advantage market, with a particular focus on recent regulatory changes affecting Special Needs Plans (SNPs). While these developments introduce near-term challenges, we believe SelectQuote is well-positioned heading into fiscal 2026. We expect the company to rebuild agent capacity ahead of the next Annual Enrollment Period (AEP), to support a trajectory of sustained revenue growth and adj. EBITDA margin expansion.
Special Needs changes. Our revised Q4 outlook is primarily driven by recent changes implemented by CMS that restructure Special Needs Plan switching rights. The policy shift narrows mid-year enrollment flexibility for a significant portion of dual-eligible consumers (those enrolled in non-integrated D-SNPs), leading to the prospect of a smaller pool of shopping beneficiaries during the middle of calendar 2025. In addition, we are accounting for SelectQuote’s reduced year-over-year agent count, which entered fiscal 2025 approximately 22% below the prior-year level due to capital constraints at the time. These factors combined create a more muted backdrop for near-term Medicare Advantage performance.
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