GoHealth Inc. (NASDAQ: GOCO) experienced a challenging second quarter in 2025, with net revenues falling 11.2% year-over-year to $94.0M. This decline was primarily due to decreases in partner revenue and non-agency revenue by 44.4% and 79.4%, respectively, though partially offset by a strong performance in other revenues, notably from the GoHealth Protect initiative. The company attributes this downturn to broader market softness but remains committed to adapting its strategies to navigate these challenges.
In a strategic move to strengthen its financial footing, GoHealth secured a new senior secured super priority term loan facility, including $80.0M in new funding. This development not only brings the company back into compliance with its debt covenants but also opens the door for potential acquisitions, thanks to a $250.0M debt basket allocated for such purposes. Additionally, GoHealth has renegotiated terms of its current debt facility, achieving a reset of financial covenants and a temporary halt in interest rate payments until 2026. These steps underscore management's proactive approach to ensuring the company's stability and growth potential.
Despite the revenue setbacks, GoHealth demonstrated efficiency in managing costs, with the average cost of customer acquisition improving by 4.8% year-over-year to $613. The company's focus on enhancing call center productivity, agent training, and marketing strategies is expected to further optimize operational costs. With the upcoming Annual Enrollment Period (AEP), GoHealth is poised to leverage its strategic initiatives and financial adjustments to rebound from the current quarter's performance.
Stonegate Capital Partners, in its updated coverage, values GoHealth Inc. with an EV/EBITDA range of 7.0x to 8.0x, suggesting a potential stock price range of $11.45 to $15.40, based on FY26 expected EBITDA. This valuation reflects confidence in GoHealth's ability to navigate through current market challenges and capitalize on future opportunities. For more details on Stonegate Capital Partners' analysis, visit https://www.stonegateinc.com.
