Ehealth Cuts FY Outlook; Stock Plunges

(RTTNews) - eHealth Inc. (EHTH), a private online health insurance marketplace in the United States, said that it expects net income for the year ended December 31, 2020 to be in the range of $43.5 million to $45.5 million compared to the prior guidance of $79.0 million to $94.0 million.

In Friday pre-market trade, EHTH was trading at $64.00, down $14.20 or 18.16 percent.

Revenue for the year ended December 31, 2020 is expected to be in the range of $581.0 million to $583.0 million compared to the company's guidance of $630.0 million to $670.0 million. Analysts polled by Thomson Reuters expect the company to report revenues of $659.05 million for the year. Analysts' estimates typically exclude special items.

Looking ahead for the fourth-quarter, the company projects GAAP net income to be in the range of $57.0 million to $59.0 million, and revenue of $291.0 million to $293.0 million. Analysts expect revenues of $369.24 million for the fourth-quarter.

In a separate press release, eHealth said that an affiliate of H.I.G. Capital, a global alternative investment firm, has reached a binding agreement to make a $225 million investment in the company by purchasing convertible preferred stock.

In connection with the investment, Aaron Tolson, Managing Director of H.I.G., will be nominated for appointment as a director to the eHealth Board of Directors upon closing of the transaction. With Tolson's appointment, the eHealth Board will consist of 8 members.