Goldman Sachs has opened coverage of Ethos Technologies Inc. (NASDAQ:LIFE) with a Buy recommendation and a price objective of $33.00, according to the firm's initial research note. That target implies significant upside versus the current share price of $10.80, a level that the stock has traded near after a decline of approximately 36% over the past six months.
The bank's initiation cites several drivers for its constructive view. Goldman Sachs expects Ethos to benefit from secular growth trends within the U.S. life insurance market, an industry the note estimates at roughly $140 billion in 2024. The firm emphasizes Ethos' positioning as a digital marketplace that connects U.S. carriers, agents and consumers and captures demand across both its Direct and Third-Party distribution channels.
Goldman Sachs projects that continued scaling of both channels will strengthen the company's data moat - an advantage that, in the firm's view, should enable Ethos to deliver more efficient and increasingly personalized consumer experiences. The note highlights the company's proprietary underwriting engine, which Goldman Sachs says supports faster decision-making and higher approval rates at competitive prices versus traditional underwriting approaches.
Operational metrics cited in the coverage underline the firm's assessment of efficiency. Ethos reported a gross profit margin of 98%, and InvestingPro Tips note the company has been profitable over the last twelve months. InvestingPro analysis included with the research indicates the stock appears undervalued at current levels, trading at a price-to-earnings ratio of 12.02.
Investors who use InvestingPro can access five additional ProTips and a fuller set of financial metrics; the company is also scheduled to report earnings in two days, a near-term event the research note flags as a data point for market participants.
Goldman Sachs' initiation comes amid a wave of recent analyst activity on Ethos Technologies. JPMorgan began coverage with an overweight rating and a $13.00 price target. Barclays also assigned an overweight rating and set a $20.00 target while drawing attention to Ethos' valuation relative to peers. Citizens rated the company market outperform with a $21.00 price target based on a discounted EBITDA approach. Baird issued an outperform rating and a $18.00 target, citing Ethos' application of artificial intelligence and machine learning in the life insurance sector.
Collectively, these broker notes reflect rising analyst interest and the potential for both upward estimate revisions and valuation expansion, as described in the various research pieces. The range of price targets across firms illustrates differing views on the magnitude and timing of the company's potential revenue and margin expansion as it scales its platform and underwriting capabilities.
Market participants will likely weigh the near-term earnings release alongside the variety of analyst perspectives when re-assessing Ethos' outlook and valuation. For now, the initiation by Goldman Sachs places the company among a cohort of analysts offering constructive ratings, with the bank assigning the most bullish price target among those noted.