SelectQuote Stock Surges 40% on Earnings Beat, But Cash Burn Raises Concerns

Shares of SelectQuote (SLQT) skyrocketed 40.5% in early trading Thursday after the insurance comparison platform reported a narrower-than-expected Q4 loss. The company posted a $0.02 per share loss versus analyst expectations of $0.13, with revenue of $345.1 million exceeding the $334.1 million forecast.

Beneath the headline numbers, SelectQuote WOULD have reported $12.9 million in profit excluding preferred stock dividends. However, the celebration may be premature - the company burned through $38 million in cash during the quarter, reversing positive free cash flow from the year-ago period.

While the GAAP valuation appears attractive at $444 million market cap against $48 million trailing earnings, the cash flow situation warrants caution. Today's explosive MOVE suggests momentum trading may be overriding fundamental concerns for now.