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What Awaits Health Insurance Innovations (HIIQ) in Q3 Earnings?

Zacks Equity Research

Health Insurance Innovations, Inc. HIIQ is set to report third-quarter 2019 earnings on Nov 12, after market close. The company delivered positive earnings surprise in three of the last four reported quarters with the average beat being 24.69%.

Let’s see how things have shaped up prior to the announcement.

Factors at Play

Health Insurance Innovations’ third-quarter results are expected to benefit from its solid portfolio of core products and individual and family plans as well as expansion of Medicare to the 65-plus market.

The company estimates third-quarter revenue contribution from Medicare channel in the range of 20% to 25% of consolidated revenues in the quarter.

Health Insurance Innovations also estimates third-party commissions as a percentage of revenues between 50% and 55%, indicating higher gross margins from expanded product portfolio.

The company estimates third-quarter revenues between $90 million and $94 million. The Zacks Consensus estimate for revenues is pegged at $90.3 million, indicating increase of 22.1% from the year-ago reported figure.

The strategy to focus on longer duration, higher lifetime value plans and e-commerce penetration and shift from lower cost and lower margin products are likely to have benefited the company. Better cross-sell experience is likely to have aided premiums at agile.

Increase in digital marketing investment at e-commerce channels is likely to have escalated selling, general and administrative expenses. The company projects $5 million to $6 million in expenses to ramp up Medicare offering ahead of the important fourth-quarter open enrollment period.

Health Insurance Innovations estimates third-quarter adjusted EBITDA between $5 million and $7 million.

Continued share buybacks are expected to have driven the bottom line.

The Zacks Consensus Estimate for earnings per share for the quarter to-be reported is pegged at 28 cents, implying a decrease of 54.1% from the year-ago reported figure. Health Insurance Innovations projects adjusted earnings per share between 30 cents and 35 cents.

Health Insurance Innovations, Inc. Price and EPS Surprise

Health Insurance Innovations, Inc. Price and EPS Surprise

Health Insurance Innovations, Inc. price-eps-surprise | Health Insurance Innovations, Inc. Quote

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for Health Insurance Innovations this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But this is not the case as you can see below.

Earnings ESP: Health Insurance Innovations has an Earnings ESP of -0.90%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Health Insurance Innovations currently carries a Zacks Rank #4 (Sell).    

Stock to Consider

A stock from the finance sector with the apt combination of elements to surpass estimates this reporting cycle is as follows:

Macro Bank Inc. BMA is set to report third-quarter earnings on Nov 26. It has an Earnings ESP of +12.2% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Peer Releases

Third-quarter earnings of Brighthouse Financial BHF and Reinsurance Group of America RGA beat the respective Zacks Consensus Estimate for earnings.

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Macro Bank Inc. (BMA) : Free Stock Analysis Report
 
Reinsurance Group of America, Incorporated (RGA) : Free Stock Analysis Report
 
Health Insurance Innovations, Inc. (HIIQ) : Free Stock Analysis Report
 
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