Jefferies & Company Maintains eHealth Hold Rating

Improvement in eHealth, Inc.'s EHTH Y/Y applications growth came at a higher marketing cost, and resulted in in-line 3Q results. “Visibility into the details of heath care reforms and MLR changes remains poor, keeping us on the sidelines,” Jefferies & Company writes. “We're maintaining a Hold rating, while raising our fair value to $14.” 3Q10 results came in-line with consensus for revenue and EPS, while applications grew 9% Y/Y, up from (3%) in 2Q10. Adds Jefferies & Company, “At $13.47, EHTH is trading at EV/EBITDA of 5.5x and a P/E of 23.6x our FY10 estimates. Our $14 PT is derived using a five-year DCF and implies an EV/EBITDA multiple of 5.1x. Risks include carrier concentration and consolidation, regulatory changes, and investments in new initiatives.” eHealth currently trades at $13.47.