Shares of the Medicare-focused digital health company and health insurance marketplace, GoHealth (NASDAQ:GOCO), closed 23.29% higher on Tuesday. GOCO stock spiked following the positive preliminary operating results for the annual enrollment period, or AEP (a set period when Medicare-eligible people are allowed to change their Medicare Advantage and Medicare Part D prescription drug coverage).
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Notably, strong AEP performance means higher medicare plan-related commission revenue for the company.
GOCO announced that its transformation plan is gaining traction with its focus on driving marketing and sales efficiencies, leading to the streamlining of its operations and resulting in a strong AEP.
It matched over 325K beneficiaries with a Medicare Advantage plan and achieved more than 25% improvement in AEP’s operating efficiency year-over-year, exceeding its guidance of up to 20%.
Furthermore, GoHealth also achieved positive cash flow from operations in Fiscal 2022.
Its cash from operations improved by over $300 million in Fiscal 2022 compared to the prior year. Notably, the company delivered positive operating cash flows earlier than expected. GOCO is expected to reach a cash flow break-even by the first half of 2023.
GoHealth’s CEO, Vijay Kotte, said that the company achieving its positive operating cash flow goal ahead of schedule is a “validation of our operating rigor and beneficiary enrollment platform.”
Is GOCO a Good Stock to Buy?
RBC Capital analyst Ben Hendrix recommends a Hold on GOCO stock. Further, the analyst’s price target of $15 implies 7.4% downside potential. While insiders have acquired GOCO shares worth $25.2M in the last quarter, it carries a Neutral Smart Score of seven on TipRanks.
