NEW YORK (TheStreet) -- Shares of eHealth (EHTH - Get Report) were falling 54.1% to $9.55 Thursday after the insurance company warned that it will report lower than expected results for the fourth quarter.
eHealth said it expects to report a loss of 56 cents a share to 47 cents a share for the fourth quarter, well below the loss of 11 cents a share analysts expect for the quarter. The company expects revenue of $43 million to $45 million for the fourth quarter, compared to analysts' estimates of $52.6 million.
The insurance company also lowered its full year 2014 revenue estimates to between $178 million and $180 million from a range of $185 million to $194 million.
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TheStreet Ratings team rates EHEALTH INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate EHEALTH INC (EHTH) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and premium valuation."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 775.9% when compared to the same quarter one year prior, rising from $0.17 million to $1.52 million.
- Net operating cash flow has increased to $10.96 million or 26.30% when compared to the same quarter last year. Despite an increase in cash flow, EHEALTH INC's average is still marginally south of the industry average growth rate of 33.41%.
- EHTH, with its decline in revenue, underperformed when compared the industry average of 21.0%. Since the same quarter one year prior, revenues slightly dropped by 2.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, EHEALTH INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- You can view the full analysis from the report here: EHTH Ratings Report