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eHealth, Inc.: A Buy And Hold Idea With 50% Upside Potential

Mar. 09, 2023 1:51 PM ETeHealth, Inc. (EHTH)GOCO, INTU, SLQT9 Comments


  • This is an in-depth piece on eHealth, and its two main peers - GoHealth and SelectQuote.
  • EHTH reported fantastic results for Q4 FY 2022 and offered really solid FY 2023 guidance. The company is making all of the right business moves. This should create a tailwind.
  • Perhaps, most importantly, the industry appears to have gotten religion! And with EHTH shares trading at only 41% of book value, they look compelling.
  • Looking for a portfolio of ideas like this one? Members of Second Wind Capital get exclusive access to our subscriber-only portfolios. Learn More »
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Today, I write to share my Buy and Hold thesis on eHealth, Inc. (NASDAQ:EHTH). EHTH is a name that has been on my radar, for quite some time. However, it wasn't until the morning of January 25, 2023, where I invested any capital and

Second Wind Capital is a value oriented investment service with a strong recent track record of exceptional outperformance. The focus is mostly small cap value and special situation equities. From January 1, 2020 - December 31, 2022, the flagship account has compounded at 43.7% per year. 

This article was written by

Courage & Conviction has been investing for over twenty years and has spent five years working as a buy-side analyst within a $45 billion investment-grade bond department, 3.5 years as an energy analyst, in addition to various other corporate finance roles. He has been a full time investor and author since 2020.

He leads the investing group Second Wind Capital, providing in-depth analysis on under-the-radar smallcap value ideas. He shares his real-money portfolio and does research based on fundamentals, synthesizing industry ecosystems and regularly interviewing management teams. He teaches community members to embrace volatility and exercise patience to drive alpha creation.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of EHTH either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (9)

Damon Judd profile picture
This is looking like a good call today.
Any change to the thesis?
Courage & Conviction Investing profile picture
@jrc89 No change. Incidentally, I sent out an alert to my group that I added a bunch more, at $5 even, at the open.
Thanks for the update!
16 Apr. 2023
Retention efforts are improving, but there is a need for improvement in the underlying tools that agents and advocates use, in order to truly enhance the customer experience to the point where there is a tangible benefit for the customer in making an extra call. The value of contracted insurance, as a broker, lies in the subject matter expertise (SME) that results in time and frustration savings, and/or outcomes that might not have been achieved without professional guidance.

eHealth needs to deliver value on every call, to themselves, the carrier, and the member, so that they can drive a better experience and more efficient outcomes that keep customers anchored. If someone is advocating for me and knows how to do it, that experience shouldn't include five transfers within the carrier call center before we talk to the proper resource. eHealth should have the data to reach the correct resource directly, but they don't have the tools to properly track and reuse that information on future calls.

Until this happens, their focus on retention is incomplete, and their efforts will be impacted, as they fail to tackle the core problems of what it takes to make their people work with efficiency. That lack of efficiency can be off-putting.
Great article. You confirmed my research.
I bought EHTH for 2.99 average and count on x8-10 fold gain within next 9 months.
SelectQuote likely going bankrupt and GoHelath going nowhere- terrible businesses
Courage & Conviction Investing profile picture
@DogeLoin Can you please walk me through the lemonade stand? How much do they get paid for a brand new Medicare Advantage member? And how much do they get paid in the second year and renewal year? And how much does it cost to onboard them. I know the answers to all of those questions, but I'm wondering if you do? I'm hoping that you do, as you're making the sweeping statement.
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