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What do the 2026 results and 2027 guidance show?

SelectQuote told investors that the key reason to own the stock is now cash generation rather than growth. The company’s fiscal 2026 revenue rose 6% year over year to $1.62 billion, while cash flow from operations increased by $44 million from the prior year.

Still, the financial picture was more cautious. The fourth quarter ended with a $16.8 million net loss, compared with net income of $12.9 million in the same period a year earlier; the company also guided for fiscal 2027 revenue of between $1.35 billion and $1.45 billion. At the midpoint, that would be about 14% below fiscal 2026.

How are the business units shaping up?

Healthcare services are growing, but regulatory pressure is building

The Healthcare Services unit generated $845 million in fiscal 2026 revenue, up 14%, helped by the SelectRx pharmacy business. However, changes to drug pricing under the U.S. Inflation Reduction Act began to weigh on the segment in the second half of the year.

The company said that by the end of the fourth quarter, the unit’s annualized adjusted EBITDA run rate had reached about $50 million, roughly double the $25 million recorded for the full year. Margins are expected to keep improving as a larger share of prescriptions is routed to the facility in Olathe, Kansas, which the company said ships about 30% more efficiently than older sites.

Senior segment margins hold steady as revenue slips

In the Senior segment, the adjusted EBITDA margin held at 26% for a fourth straight year. Revenue in the segment, however, fell 4% to $576 million after a major insurance partner cut back on marketing spending.

  • SelectQuote expects an additional 10% to 15% decline in fiscal 2027 approved Medicare Advantage policies.
  • SelectRx membership fell to 109,039 and is expected to weaken further before recovering.
  • The company identified more than $30 million in annualized savings potential from AI-powered enrollment tools and workflow automation.

Why are debt costs and valuation multiples under scrutiny?

Alongside the weaker revenue outlook, financing costs are also in investors’ sights. The company has about $800 million in debt and preferred equity, and an estimated 12% funding cost translates into roughly $45 million in annual cash interest expense.

Market indicators are sending mixed signals. The number of hedge funds with positions rose from 13 to 21 quarter over quarter, while the short interest ratio remained at 1.16% of shares outstanding; at the same time, the stock’s 66.67 forward price-to-earnings ratio as of Sept. 1 suggests much of the expected earnings growth may already be reflected in the price.

Management aims to lift operating cash flow above $60 million in fiscal 2027. That goal will depend on delivering the expected expansion in healthcare margins and sustaining efficiency gains at the Olathe facility at scale.

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