SelectQuote Earnings Beat Forecasts, Stock Surges 40.5%

SelectQuote stock surged 40.5% on Thursday morning after beating Q4 2025 earnings forecasts. The company reported a profit before paying dividends to preferred stockholders, but free cash flow was deeply negative. SelectQuote stock trades at a low P/E ratio of 9.2, but investors should be cautious about the negative free cash flow trend.

SelectQuote Inc. (NYSE: SLQT) stock surged 40.5% on Thursday morning after the company reported its Q4 2025 earnings. The stock climbed from $1.88 to $2.53, reflecting investor confidence in the company's performance. SelectQuote beat the consensus estimate for earnings, reporting a profit before paying dividends to preferred stockholders, but the free cash flow was deeply negative [2].

The company's Q4 revenue was $345.1 million, surpassing the consensus estimate of $334.086 million. This figure also represents an increase compared to the $307.2 million reported in the fourth quarter of the prior fiscal year. SelectQuote reported an EPS loss of 2 cents, which beat the estimated EPS loss of 17 cents. For the quarter, the company posted a net income of $12.9 million, a significant turnaround from the consolidated net loss of $31 million in the same period last year [3].

Looking ahead, SelectQuote provided strong guidance for fiscal year 2026, anticipating revenue in the range of $1.650 billion to $1.750 billion and Adjusted EBITDA between $120 million and $150 million. CEO Tim Danker commented on the results, stating, “We are proud to have delivered financial results well in excess of our initial expectations for the 3rd consecutive year” [3].

However, investors should be cautious about the negative free cash flow trend. SelectQuote's free cash flow has run negative in four of the past five years, including the current quarter. The company's free cash flow was deeply negative, with a burn rate of about $38 million in the quarter [2].

SelectQuote's stock trades at a low P/E ratio of 9.2, making it appear cheap on a valuation basis. However, the negative free cash flow trend could be a red flag for investors. The company's ability to turn around this trend will be crucial for long-term investors.

References:
[1] https://finance.yahoo.com/news/earnings-watch-selectquote-inc-slqt-132125758.html
[2] https://www.mitrade.com/insights/news/live-news/article-8-1059432-20250821
[3] https://www.benzinga.com/trading-ideas/movers/25/08/47264341/selectquote-slqt-stock-surges-after-q4-earnings-crush-estimates