11:26 AM EST, 12/04/2024 (MT Newswires) -- eHealth (EHTH) is facing a "volatile and uncertain" environment related to expectations of an increased churn in the Medicare Advantage space, UBS Securities said in a Wednesday note.

"There is a significant shift in carrier behavior through a combination of plan exits, reduction of benefits, and cutting of commissions," said UBS, noting that these factors are likely to results in a substantial number of beneficiaries exiting their 2025 plans and selecting a new one.

UBS said the scenario creates an opportunity for eHealth to boost sales volume but could also "drive significantly more churn than expected," potentially pressuring cash flow and/or commissions.

On the other hand, UBS noted that eHealth has improved cash flow and core operations over the past few years, and is recently shifting away from the traditional agent model to fee-based revenue.

UBS initiated coverage on eHealth with a neutral rating and a $5.50 price target.

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