Bank Of America Sees Top-Line Story Still On Track For Health Insurance Innovations

In a report published Tuesday, Bank of America analyst Kevin Fischbeck reiterated a Buy rating and $16.00 price target on

. In the report, Bank of America noted, “HIIQ reported adj. Q2 EPS of $0.06 (ex $0.01 fair value adj to contingent consideration), $0.04 below our est, as higher than expected revenue was more than offset by lower core margins. HIIQ increased guidance for growth in premium equivalents to at least 45% (was at least 31.8%) and introduced guidance for revenue growth of at least 45%. Revenues of $20.94m increased 54% y/y and were 2.7% above our est. "While the top line growth was strong, STM growth decelerated q/q to 11% (from 17%); we thought growth could accelerate outside of the open enrollment period without competition from major medical plans. However, growth in ancillary more than picked up the slack, highlighting the power of the distribution channel. We are lowering our 2014/2015 EPS ests to $0.34/$0.81 from $0.42/$0.85 with the view that G&A spending will remain higher in the near term, but leaving our 2016 EPS est of $1.20 unchanged. We reiterate our $16 PO and Buy rating as the impressive HIIQ top line growth story appears on track.” Health Insurance Innovations closed on Monday at $12.85.