Insurance distributor SelectQuote soars 30% after strategic investment

Shares of small-cap SelectQuote, a distributor of Medicare insurance policies and operator of an expanding healthcare services platform, jumped 30% yesterday, February 11, to mark a three-year high. The trigger was the company’s announcement of a $350 million strategic investment, the proceeds from which will be used for business expansion and debt refinancing.

SelectQuote jumped 30% on the New York Stock Exchange yesterday to $5.73 per share. This marked the highest closing price since February 7, 2022, when the stock closed at $6.53 per share. In premarket trading today, however, it has given back 3.1% as of this writing. Over the last 12 months, SelectQuote has quadrupled, although since it went public in June 2020, it is still off more than 78%.

On the evening of Monday, February 10, SelectQuote announced it had raised $350 million from funds managed by Bain Capital, Morgan Stanley Private Credit, and Newlight Partners. The amount raised represents approximately 35% of the company’s current market capitalization.

The deal will enable SelectQuote to expand its healthcare services business, recapitalize its balance sheet, and reduce its debt servicing costs, according to the press release. In the company’s results for the second quarter of fiscal 2025, which ended December 31, cash was reported at $12.1 million — down almost 72% versus six months earlier — while accounts payable more than doubled to $87.2 million.

SelectQuote describes itself as a pioneer in shopping for insurance, offering unbiased comparisons of products from multiple insurers and enabling consumers to choose the one that best suits their needs. It has three business lines: SelectQuote Senior, which sells Medicare policies to seniors; SelectQuote Healthcare Services, which includes, among other things, pharmacy services; and SelectQuote Life, which offers life insurance.

In the second quarter of fiscal 2025, SelectQuote’s consolidated revenue grew nearly 19% year over year to $481.1 million, while net income soared 174% to $53.2 million.

“SelectQuote delivered impressive results during our fiscal second quarter despite a historically disruptive annual enrollment period. American Seniors faced an unprecedented level of plan terminations and benefit changes this season, and we take great pride in that fact that consumers sought out SelectQuote as they navigated such a challenging market backdrop,” said CEO Tim Danker.

For the full 2025 fiscal year, SelectQuote guides for revenue in a range of $1.50 billion to $1.58 billion. As for the bottom line, the company gives a range of a net loss of up to $24 million and a net profit of up to $11 million. For comparison, fiscal-year 2024, which ended June 30, saw revenue of $1.3 billion and a net loss of $34.1 million.

Three analysts track the company, according to MarketWatch. Two rate SelectQuote as a “buy” and one a “hold.” Their average target price is $6.67 per share, implying upside of over 16% versus the last closing price.