Goosehead Insurance price target lowered to $72 from $90 at BMO Capital

BMO Capital lowered the firm’s price target on Goosehead Insurance to $72 from $90 but keeps an Outperform rating on the shares after its Q1 results last week. The company’s growth metrics continued to trend in the wrong direction, which is largely attributable to insurers’ being unwilling to open up their growth budgets until they see a light at the end of the profit margin tunnel, the analyst tells investors in a research note. BMO adds however that Goosehead management’s recent pivot to the higher long-term profit margin franchise model will accelerate in coming years, and the firm believes that the company’s business model can scale margins beyond 25% in the coming decade.