GoHealth Reports Challenging Q3 2025 Amid Medicare Advantage Market Shifts

Stonegate Capital Partners has updated its coverage on GoHealth Inc. (NASDAQ: GOCO) following the company's challenging third quarter 2025 performance. GoHealth reported net revenues declining to $34.2 million from $118.3 million a year ago, reflecting an intentional pullback in Medicare Advantage volume, reduced non-agency activity, and broader industry shifts toward margin integrity and renewal stability. The company continues to navigate a materially different Medicare Advantage environment that has pressured traditional revenue streams while newer offerings like GoHealth Protect show promising growth.

The strategic initiatives undertaken during 3Q25 built upon the super priority term loan facility finalized earlier in the year. This senior secured super priority term loan, including $80.0 million of new money, continues to support working capital and enhance strategic flexibility while keeping the company in compliance with its debt covenants. Management has focused on preserving liquidity, platform efficiency, and maintaining a high-quality member base despite the challenging market conditions. The company also refreshed its Board of Directors and continues to evaluate integration opportunities across what it views as a fragmented broker landscape.

Sales performance reflected the strategic shift with sales per submission declining by 34.3% year-over-year to $461. Agency revenue decreased by 71.5% while non-agency revenue declined by 96.5% year-over-year. However, other revenue grew meaningfully, supported by continued momentum in GoHealth Protect, which is becoming a more important contributor to the business model and helping to diversify revenue beyond traditional commission streams. The Sales/Direct Operating Cost of Submission ratio moved down to 0.6x from 1.1x as lower scale and mix shifts weighed on leverage.

Cost of acquisition presented additional challenges with average CAC increasing 14.0% year-over-year to $716. While near-term margins remain compressed given the intentional pullback in volume and higher quarterly unit costs, management maintains a disciplined approach to acquisition efficiency. The focus remains on agent productivity, enhanced training, and data-driven marketing strategies that should support better unit economics over time. As 2025 progresses, management remains concentrated on retention, quality, and disciplined execution through the current Annual Enrollment Period.

Stonegate Capital Partners' valuation analysis uses a combined historical FY24 EBITDA blended with expected FY27 EBITDA to normalize to a medium-term EBITDA of approximately $85.0 million. Applying an EV/EBITDA range of 9.0x to 11.0x with a midpoint of 10.0x and adjusting for minority interest results in a valuation range of $7.46 to $14.32 with a mid-point of $10.89. The firm believes management has been creative in stabilizing the balance sheet and strengthening strategic optionality, allowing greater focus on execution and retention heading into and through the enrollment period.