Breaking Down Goosehead Insurance, Inc (GSHD) Financial Health: Key Insights for Investors

Are you keeping a close watch on Goosehead Insurance, Inc. (GSHD) and trying to gauge its financial stability? Did you know that in 2024, the company saw a 20% increase in total revenue, reaching $314.5 million? What’s more, their total written premiums jumped by 29% to an impressive $3.8 billion! Net income more than doubled, soaring to $49.1 million. With these figures in mind, let's explore the key financial insights that can help you make informed decisions about Goosehead Insurance.

Goosehead Insurance, Inc (GSHD) Revenue Analysis

Goosehead Insurance, Inc. primarily generates revenue through commissions and franchise fees. Commissions are earned from the sale of insurance policies, while franchise fees come from their franchise operations. Understanding the breakdown of these revenue streams is crucial for investors.

Analyzing year-over-year revenue growth provides insights into the company's performance and market position. Goosehead Insurance has demonstrated significant revenue growth in recent years. For instance, in 2023, total revenues reached $375.7 million, a 32% increase compared to 2022. This growth is further highlighted by a 33% increase in core revenues, which hit $368.4 million. The company's success is attributed to its expanding franchise network and increased policy sales.

Here's a breakdown of Goosehead Insurance's revenue streams, based on the latest financial data:

• Franchise Royalties and Fees: A substantial portion of revenue comes from royalties and fees paid by franchisees.
• Commissions: These are earned on the sale of insurance policies, forming a significant part of the overall revenue.
• Corporate Sales: Revenue generated directly through the company's corporate sales channels.

To get a clearer picture, let's look at a table summarizing the revenue components:

Analyzing the contribution of different business segments to overall revenue is essential. The franchise segment and commissions from policy sales are the primary drivers of revenue for Goosehead Insurance. Any significant changes in these streams can impact the company’s financial health.

For example, the increase in 'Other Revenue' from $0.7 million to $7.3 million between 2022 and 2023 indicates substantial growth in smaller revenue streams. This could be due to new services or products offered by the company.

Understanding these dynamics helps investors assess the stability and growth potential of Goosehead Insurance. You can learn more about the company's core values and objectives at: Mission Statement, Vision, & Core Values of Goosehead Insurance, Inc (GSHD).

Goosehead Insurance, Inc (GSHD) Profitability Metrics

Analyzing Goosehead Insurance, Inc (GSHD)'s profitability involves examining several key metrics that provide insights into its financial health and operational efficiency. These include gross profit, operating profit, and net profit margins, as well as trends in these metrics over time.

For the full year 2024, Goosehead Insurance reported:

• Total revenue increased by 20% to $314.5 million.
• Core revenue grew by 17% to $273.7 million.
• Net income more than doubled, reaching $49.1 million, compared to $23.7 million in 2023.
• Adjusted EBITDA increased by 43% to $99.9 million.

In the fourth quarter of 2024:

• Total revenues grew by 49% year-over-year to $93.9 million.
• Net income was $23.8 million, a significant increase from $5.4 million a year ago.
• Net income margin for the fourth quarter was 25%.

Here's an overview of Goosehead Insurance's financial performance metrics:

Gross Profit:

• Goosehead Insurance's annualized Gross Profit for the quarter that ended in December 2024 was $375.7 million.
• Gross-Profit-to-Asset % for the quarter that ended in December 2024 was 99.43%.

Gross Profit Margin:

• For the Trailing 12 Months (TTM) ending September 30, 2024, Goosehead Insurance Gross Profit Margin is 41.22%, a 1129.53% change year over year.

Net Profit Margin:

• The net profit margin for the fourth quarter of 2024 was 25%.
• Goosehead Insurance's Net Margin for the quarter that ended in Dec. 2024 was 15.82%.
• Net Income of $49.1 million in 2024 versus $23.7 million in 2023.

A comparison of Goosehead Insurance’s profitability ratios with industry averages can provide valuable context. For instance, Goosehead's Return on Assets (ROA) of 5.36% outperforms 81.69% of companies in the insurance industry. Similarly, its Return on Equity (ROE) of 32.89% outperforms 95.07% of its industry peers, and its Return on Invested Capital (ROIC) of 13.50% outperforms 97.89% of companies in the same industry.

Operational efficiency is evident in Goosehead Insurance's cost management and gross margin trends. The company's strategic investments in technology and franchise productivity have positioned it well for continued expansion. The significant rise in net income and adjusted EBITDA margins reflects effective cost management and operational efficiency.

Strategic initiatives, such as a new credit agreement providing for an aggregate $300 million term loan and a $75 million revolving credit facility, along with a special distribution of $175 million and a one-time special cash dividend of $5.91 per share totaling $146 million, highlight proactive financial management.

Here is a table summarizing key financial data for Goosehead Insurance in 2024:

For more insights into Goosehead Insurance, Inc (GSHD), explore: Exploring Goosehead Insurance, Inc (GSHD) Investor Profile: Who’s Buying and Why?

Goosehead Insurance, Inc (GSHD) Debt vs. Equity Structure

Understanding how Goosehead Insurance, Inc (GSHD) finances its operations and growth is crucial for investors. This involves analyzing its debt levels, debt-to-equity ratio, and overall approach to balancing debt and equity financing. Here’s a breakdown of GSHD's financial strategies:

As of the fiscal year 2024, Goosehead Insurance, Inc (GSHD) exhibits a financial profile characterized by strategic management of its debt and equity. A comprehensive look into their approach reveals:

Overview of Debt Levels

Goosehead Insurance, Inc (GSHD) employs a mix of debt financing to support its expansion and operational needs. A snapshot of their debt structure includes:

• Long-term Debt: As of 2024, the company holds approximately $272.5 million in long-term debt.
• Short-term Debt: The short-term debt obligations stand around $4.1 million.

Debt-to-Equity Ratio

The debt-to-equity ratio is a key metric for assessing a company's financial leverage. For Goosehead Insurance, Inc (GSHD):

• The debt-to-equity ratio is approximately 1.93. This indicates that GSHD uses $1.93 of debt for every dollar of equity.

Compared to the industry, this ratio positions Goosehead Insurance, Inc (GSHD) as relatively leveraged, reflecting its growth-oriented financial strategy. The industry average varies, but a ratio around 1.0 is often seen as a benchmark.

Recent Financing Activities

Recent activities in debt and equity markets provide insight into Goosehead Insurance, Inc (GSHD)'s financial management:

• In 2024, Goosehead Insurance, Inc (GSHD) has not issued any new debt.
• No credit ratings or refinancing activities were recorded.

Balancing Debt and Equity

Goosehead Insurance, Inc (GSHD) strategically balances debt and equity to fuel growth while maintaining financial stability:

• The company's approach involves leveraging debt to fund expansion initiatives, particularly in technology and franchise development.
• Equity funding is utilized to maintain a healthy capital structure and support long-term strategic objectives.

Here’s a summarized table of Goosehead Insurance, Inc (GSHD)'s debt and equity data:

For further insights into Goosehead Insurance, Inc (GSHD)'s financial health, you can explore more details here: Breaking Down Goosehead Insurance, Inc (GSHD) Financial Health: Key Insights for Investors

Goosehead Insurance, Inc (GSHD) Liquidity and Solvency

Analyzing Goosehead Insurance, Inc (GSHD)'s financial health involves a close look at its liquidity and solvency positions. These metrics provide insights into the company's ability to meet its short-term and long-term obligations.

Here's a breakdown of key liquidity measures:

• Current Ratio: This ratio assesses a company's ability to cover its short-term liabilities with its short-term assets.
• Quick Ratio: Similar to the current ratio, the quick ratio excludes inventories from current assets, offering a more conservative view of liquidity.
• Working Capital: Monitoring the trend in working capital (current assets minus current liabilities) helps to understand if the company's short-term financial health is improving or deteriorating.

Based on the 2024 financial data, here’s an overview of Goosehead Insurance, Inc (GSHD)'s cash flow trends:

• Operating Cash Flow: This indicates the cash a company generates from its normal business operations. A positive trend suggests the company is effectively generating cash from its core activities.
• Investing Cash Flow: This section reflects cash spent on investments, such as property, plant, and equipment (PP&E). It can also include proceeds from the sale of assets.
• Financing Cash Flow: This involves cash flow related to debt, equity, and dividends. It shows how the company is funding its operations and returning value to shareholders.

Potential liquidity concerns or strengths can be identified by examining these cash flow trends and liquidity ratios over time. For example, a consistently declining current ratio might signal potential liquidity issues, whereas strong positive operating cash flow indicates a solid liquidity position.

For a deeper dive into the investors and stakeholders of Goosehead Insurance, Inc (GSHD), check out: Exploring Goosehead Insurance, Inc (GSHD) Investor Profile: Who’s Buying and Why?

Goosehead Insurance, Inc (GSHD) Valuation Analysis

Assessing whether Goosehead Insurance, Inc (GSHD) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst opinions. Let's delve into these aspects to provide a clearer picture for investors. You can find more details on Breaking Down Goosehead Insurance, Inc (GSHD) Financial Health: Key Insights for Investors.

When evaluating valuation, several ratios offer valuable insights:

• Price-to-Earnings (P/E) Ratio: This ratio compares a company's stock price to its earnings per share (EPS). While a high P/E ratio might suggest overvaluation, it could also indicate strong growth expectations.
• Price-to-Book (P/B) Ratio: The P/B ratio relates a company's market capitalization to its book value of equity. A lower P/B ratio can imply undervaluation, but it's essential to consider the company's industry and financial health.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio compares a company's enterprise value (total market value plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It provides a more comprehensive valuation measure, especially when comparing companies with different capital structures.

Analyzing stock price trends provides historical context. Examining Goosehead Insurance, Inc (GSHD)'s stock performance over the last 12 months (or longer) can reveal patterns, volatility, and overall investor sentiment. Significant price appreciation might suggest overvaluation, while a declining price could indicate undervaluation or underlying issues.

As of April 2025, Goosehead Insurance does not offer a dividend. Therefore, dividend yield and payout ratios are not applicable.

Here's a look into analyst perspectives to gauge market sentiment:

Analyst Consensus: Financial analysts regularly provide ratings (buy, hold, or sell) and price targets for stocks. The consensus rating reflects the overall sentiment of these experts. A strong buy consensus suggests undervaluation, while a sell consensus might indicate overvaluation. It's important to consider the source and track record of the analysts when evaluating their opinions.

To bring clarity, here is a hypothetical overview, since real-time brokerage ratings and consensus may fluctuate frequently:

In summary, determining whether Goosehead Insurance, Inc (GSHD) is overvalued or undervalued necessitates a thorough examination of financial ratios, stock performance, and analyst opinions. The hypothetical data above provides a snapshot for illustrative purposes, and investors should conduct their own due diligence using the most current data available to make informed decisions.

Goosehead Insurance, Inc (GSHD) Risk Factors

Goosehead Insurance, Inc. (GSHD) faces a variety of internal and external risks that could impact its financial health. These risks span across industry competition, regulatory changes, and overall market conditions. Understanding these potential challenges is crucial for investors.

Here's a breakdown of key risk areas:

• Industry Competition: The insurance industry is highly competitive. Goosehead faces competition from national and regional insurance brokers, direct writers, and online marketplaces. Increased competition could lead to lower commissions and reduced market share.
• Regulatory Changes: The insurance industry is heavily regulated at both the state and federal levels. Changes in regulations, such as those related to commission structures or data privacy, could increase compliance costs and negatively impact profitability.
• Market Conditions: Economic downturns, natural disasters, and other market events can significantly impact the demand for insurance products. For example, a major hurricane could lead to increased claims and reduced profitability for Goosehead and its franchisees.
• Operational Risks: As a franchise-based business, Goosehead faces operational risks related to the performance and compliance of its franchisees. Issues such as franchisee misconduct or failure to meet performance targets could damage the company's reputation and financial results.
• Financial Risks: Goosehead's financial performance is subject to risks related to its ability to manage its debt, maintain adequate capital levels, and generate sufficient cash flow. Changes in interest rates or credit market conditions could increase borrowing costs and reduce financial flexibility.
• Strategic Risks: The company's ability to execute its growth strategy, including attracting and retaining franchisees, is subject to various risks. Failure to successfully implement its strategic initiatives could limit its growth potential and impact its financial performance.

Mitigation strategies often involve diversifying revenue streams, enhancing compliance programs, and closely monitoring market trends. For example, Goosehead might invest in technology to improve efficiency and reduce operational costs, or expand its product offerings to appeal to a wider range of customers.

For more detailed insights into Goosehead Insurance, Inc. (GSHD) financial health, you can explore: Breaking Down Goosehead Insurance, Inc (GSHD) Financial Health: Key Insights for Investors

The following table summarizes some potential risks and mitigation strategies:

Understanding these risks and the strategies Goosehead employs to mitigate them is essential for investors assessing the company's long-term financial health and stability.

Goosehead Insurance, Inc (GSHD) Growth Opportunities

For investors eyeing Goosehead Insurance, Inc (GSHD), a clear understanding of its future growth prospects is crucial. Several factors appear poised to influence the company's trajectory.

Key growth drivers for Goosehead Insurance, Inc (GSHD) include:

• Product Innovations: Development of new insurance products or enhancements to existing offerings to meet evolving customer needs.
• Market Expansions: Extending its geographical footprint and penetrating new customer segments.
• Acquisitions: Strategic acquisitions of other agencies or businesses to expand market share and capabilities.

Analysts' projections offer a glimpse into the company's potential. While specific figures can vary across sources and over time, examining these estimates provides a sense of the anticipated direction. Keep in mind that these are estimates and not guarantees.

Strategic initiatives and partnerships can also significantly impact future growth. These may include:

• Technology investments aimed at improving efficiency and customer experience.
• Partnerships with other companies to offer bundled services or reach new markets.
• Franchise expansion strategies to increase agency presence.

Goosehead Insurance, Inc (GSHD) possesses several competitive advantages that could position it favorably for future growth:

• A strong franchise model that incentivizes agent growth.
• Technology platform that supports agents and enhances customer service.
• A focus on providing a wide range of insurance products through multiple carriers.

Here's a look at potential revenue growth based on available data. Note that these figures are subject to change and represent estimates:

Investors should consider these factors, alongside their own due diligence, to form a well-rounded perspective on Goosehead Insurance, Inc (GSHD)'s growth potential.

Further insights into the company's financial health can be found here: Breaking Down Goosehead Insurance, Inc (GSHD) Financial Health: Key Insights for Investors