There is a tremendous market opportunity around the corner for NYSE: SLQT at https://www.webull.com/quote/nyse-slqt as management focuses on senior revenue. According to its S1, the proportion of the population that is 65 years or older is expected to be near 17% in 2020, up from 13% in 2010 and 15% in 2016. SLQT derives almost all of its senior revenue from Medicare Advantage, with much of the rest from Medicare Supplement. Medicare Advantage is an alternative to Medicare, offered by private health insurers.
This includes more coverage options compared to the public Medicare option. MS simply acts as an add-on to Medicare with a few coverage options to supplement the Medicare product. Medicare Advantage is a great option for those who can afford it and has seen tremendous growth over the past few years. This market is rising at a steady pace and will only continue its path forward with time. Compared with other market outlooks, the senior Medicare market is highly predictable due to the certainty of age and necessity for Medicare.
The competition in the insurance space is diverse and will continue to develop. There are a few ways to buy insurance. The first way to purchase a policy is through the insurance carrier’s agents. These agents often fail to find a reasonable price for their customers, as they are paid on a commission basis. This history of aggregated data and efficiency puts SLQT in a position to succeed amongst its competitors.
Although eHealth is well ahead of SLQT in terms of market share, there is plenty of room for SLQT to grow. This is a result of eHealth’s business model being much more angled toward Medicare, while SLQT has been more diversified with auto/home and life. Investors should expect to see SLQT close the gap in the future as it focuses on the large senior market.
The medicare field is subject to heavy regulation and much debate has occurred regarding the future of healthcare. As it currently stands, private insurers are able to compete with the federal government through the use of Medicare Advantage, an attractive alternative to standard Medicare. While ‘Medicare for All’ would certainly put an end to private health insurers, it is unlikely to be implemented in the near term.
Aside from the obvious risk of federal regulation, SLQT has an attractive outlook. The Medicare market can grow to 55 million enrollees in 2025. SLQT has recorded $1,500 of revenue per approved policy. If the company can gather just 2% of the market by that time, it will have captured $1.65B in revenue. You can use the trading app with day trading options. Disclaimer: The analysis information is for reference only and does not constitute an investment recommendation.