Long-Term Opportunities For eHealth (EHTH)

Stifel Nicolaus has maintained the Hold rating on eHealth (NASDAQ: EHTH)(FREE stock trend analysis) post the analyst day presentations and strategy outline. While long-term prospects are compelling, slowing y-o-y customer acquisitions, slow conversions and uncertainty over healthcare reform are worrying factors.

eHealth proposes to enter the online marketplace for senior citizens by providing a platform to research, compare and purchase medical products and plans. The company’s fastest growing demographic segment is the 60-64 year group. The data suggests that nearly 46% of senior citizens have internet access and 70% of them research medical information online.

eHealth is also seeing an early success with Ubao.com, its online insurance exchange in China. The opportunity is nascent but revenues could prove substantial. The healthcare reform also continues to be a key focus area for the management. The eOD opportunity is huge with a highly scalable technology and high margins.

The management of eHealth is now exploring the possibility of transformative acquisitions and additional share repurchases.