eHealth, Inc. (EHTH)

NetscribeInsuran (42.40) Submitted: 3/12/07 8:07 AM : Start Price: $23.57 EHTH Score: -18.40

eHealth, Inc., formerly known as eHealthInsurance Services, is an online source of health insurance for individuals, families and small businesses. Its ecommerce platform enables individuals, families and small businesses to research, analyze, compare and purchase health insurance products that meet their needs. It has licenses to sell health insurance in all 50 states and the District of Columbia. It has established relationships with over 150 health insurance carriers, enabling it to offer more than 5,000 health insurance products online.


For year 2006, revenues enhanced by 47% to $61.3millions reflecting an increased membership, higher commission earned and increased licensing income due to additional carrier sponsorships on websites. Net income recorded $16.5millions against a loss of $414 thousand as it was benefited from better efficiencies in online marketing programs and an increase in interest income due to higher cash balances.


Over the period of five years revenue has grown at rate of 48.7% outperforming industry growth rate of 7.2% by a huge margin. Company provides pricing transparency, convenience in comparison of different products and easy-to-use information on product design just a click away. Its selection of products and plans is very broad with highest of 98 products in Chicago. Members acquisition cost is no more a worrying factor as it’s on reducing trend as evident by 6% reduction in previous quarter.


As of now for a medium period, stock is expected to outperform. But from a long term point of view, in order sustain growth, company needs to address many problems like easily adoptable business plan, non-recurring revenue model and state regulation’s prevention from selling health insurance for a lower price than it can be obtained elsewhere.

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