Goosehead stock holds $150 target despite Q1 misses

On Thursday, Goosehead Insurance Inc . (NASDAQ:GSHD) maintained its Market Outperform rating and $150.00 price target from JMP analysts following the company’s first-quarter earnings report for 2025. The insurance firm reported mixed results, with earnings per share (EPS) exceeding expectations, while revenue and EBITDA fell short.

Goosehead Insurance’s operating EPS reached $0.28, surpassing JMP’s projection of $0.20 and the consensus estimate of $0.22. This higher-than-anticipated EPS was primarily due to a tax benefit of $1.7 million, compared to the estimated expense of $1.4 million, and higher corporate channel contingent commissions of $4.5 million versus the expected $4.0 million. Despite these positive aspects, total revenue for the quarter came in at $75.8 million, which did not meet JMP’s $78.6 million forecast or the consensus of $78.1 million. Core revenues also fell short, recording $69.1 million against the anticipated $72.7 million and consensus of $71.7 million. The company has maintained strong growth momentum, with revenue increasing 20.68% over the last twelve months.

One of the key performance indicators (KPIs), total written premiums, matched expectations, showcasing a 22.2% increase to $1.00 billion. This aligns closely with the estimated growth of 22.9% to $1.01 billion. Goosehead Insurance’s recent investments and strategic repositioning within both the Corporate and Franchise channels have started to bear fruit, leading to better productivity. Moreover, the company has seen an improvement in product availability across several previously constrained markets.

Adjusted EBITDA for the quarter was reported at $15.5 million, which did not meet JMP’s expectation of $18.2 million or the consensus of $16.6 million. The EBITDA margin stood at 21%, which was consistent with consensus projections but fell short of JMP’s 23% estimate. Nevertheless, Goosehead Insurance saw a 13% increase in policies in force, totaling 1.729 million. InvestingPro data reveals the company has demonstrated impressive profitability metrics, with a return on equity of 85% and strong cash flow generation. Subscribers can access 10+ additional ProTips and comprehensive financial metrics in the Pro Research Report.

In summary, while Goosehead Insurance experienced some setbacks in top-line revenue and EBITDA during the first quarter of 2025, the company’s EPS outperformance and steady growth in written premiums appear to have contributed to JMP’s continued confidence in the stock, as reflected in the reaffirmed price target and rating. Trading at a P/E ratio of 86.11, the stock commands a premium valuation, though InvestingPro analysis suggests the company’s strong growth prospects and financial health metrics support its current market position.

In other recent news, Goosehead Insurance reported its Q1 2025 earnings, revealing an earnings per share (EPS) of $0.26, surpassing the analyst forecast of $0.24. Despite this positive EPS result, the company fell short on revenue expectations, reporting $75.6 million against a forecast of $78.89 million. The company achieved a milestone with total written premiums reaching $1 billion, marking a 22% year-over-year increase. Franchise premiums rose by 27%, while corporate premiums increased by 5%. Goosehead Insurance’s adjusted EBITDA also saw a significant rise, growing by 32% to $15.5 million. The company projects full-year total revenue between $350 million and $385 million, indicating an 11-22% growth. Goosehead Insurance emphasizes its focus on geographic expansion and franchise quality as key growth drivers. Analysts from KBW and JPMorgan have shown interest in Goosehead’s partnership potential with mortgage servicers and the impact of pricing stability on client retention.

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