Goosehead Insurance Inc. - GSHD
Update
I’ve been following the GSHD story for quite a few years, and this was the first quarter that I can remember where they not only missed their own estimates but also lowered overall estimates for the full year. Revenue estimates for the year went from a range of $310M-$320M down to $290M-$310M which effectively is a 5% decline at the midpoint. Total written premiums were likewise nudged down a couple of percent, while they had no updates for either contingent commissions or adjusted EBITDA margins.
A couple months back I made a comment on a
post about companies that stop reporting metrics that were previously provided (kinda like NFLX recently doing with subscriber numbers) and I pointed out that during Q4 2023 GSHD changed the metric for counting operating franchisees. It wasn’t a huge change, and I’m sure they still track those numbers, but it makes you wonder what’s going wrong in one of the sets of numbers if they feel they now have to combine them into a single metric. They used to break down franchisees as either Texas-based or non-Texas based, and now they’re all combined into a single number.This particular metric, the number of operating franchisees they count, has been declining steadily over the past year since peaking in Q4 2022, and much more in the non-Texas based franchise count. Does this metric possibly hold some clues for their future?