Why eHealth Stock Jumped 22% in March

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What happened

eHealth (NASDAQ:EHTH) shareholders beat a rising market last month. Their stock jumped 22% in March compared to a 4.2% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

The spike didn’t erase all of the stock’s recent losses, though, and eHealth is still trailing the market’s 8% increase so far in 2021.

Image source: Getty Images.

So what

The online insurance provider’s stock has been recovering since the drubbing it took following the preliminary fourth-quarter earnings report management issued in late January. Its official results, about a month later, topped those projections as sales declines landed at 3%. Investors were happy to hear eHealth forecast a quick return to growth in the current quarter, and that optimism likely drove the stock’s rally last month.

Now what

That optimism will be tested when eHealth announces its fiscal first-quarter results in late April. Most investors who follow the stock are expecting that report to show sales climbed 26% to $110 million.

The stock’s trajectory from there will depend on whether CEO Scott Flanders and his team still see the Q4 sales challenges as just a temporary speed bump. That optimism should be reflected in another bullish outlook on membership and commission revenue as part of eHealth’s Q1 announcement.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.