SLQT Should I Buy
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SelectQuote Inc (SLQT) is not a strong buy for a beginner investor with a long-term focus and $50,000-$100,000 available for investment. The stock is facing significant challenges, including a delisting notice, financial difficulties, and lowered guidance. While there is some potential for recovery, the risks outweigh the rewards for a long-term, beginner investor at this time.
The technical indicators show a bearish trend with moving averages (SMA_200 > SMA_20 > SMA_5) and the RSI at 34.57, which is neutral. The stock is trading near its support level (S1: 0.602) but lacks strong upward momentum as the MACD is positively contracting. Short-term price trends suggest a 0.45% chance of increase in the next day but a -1.42% decrease in the next week.
Additionally, the company plans to regain compliance with NYSE listing requirements, which could stabilize the stock price if successful.
The company received a delisting notice from the NYSE due to its stock price trading below $1 for 30 consecutive days. Financial challenges include a $40 million shortfall and lowered 2026 guidance. Gross margin, EPS, and net income have all declined YoY. Analysts have lowered price targets, reflecting uncertainty.
In Q2 2026, revenue increased by 11.65% YoY to $537.1 million. However, net income dropped by -3.88% YoY to $51.17 million, and EPS declined by -10.00% YoY to 0.27. Gross margin also fell by -8.39% YoY to 42.61%. The financial performance shows mixed results with growth in revenue but declining profitability.
Analysts have lowered price targets recently, with Noble Capital reducing its target from $7 to $5 and Craig-Hallum reducing it from $4 to $3. Both firms maintain positive ratings (Outperform and Buy, respectively) but acknowledge heightened uncertainty and lowered guidance.
