Ethos Technologies Stock Jumps 10% as Life Insurance Platform Posts 151% Revenue Growth, Raises Outlook

Shares of Ethos Technologies rose almost 10% in early trading Tuesday, a day after the life insurance technology company reported record third-quarter results and raised its full-year forecast.

The Nasdaq-listed stock, which trades under the ticker LIFE, gained $4.22 to $46.84 shortly after the opening bell. That gives the Austin, Texas-based company a market value of about $2.77 billion. The shares are up about 153% over the past 52 weeks.

Revenue more than doubles

Ethos said revenue for the quarter ended Sept. 30 rose 151% from a year earlier to $235.2 million. Before the report, analysts' consensus estimate for quarterly revenue had been about $166 million.

Both of the company's sales channels grew. Revenue from its direct-to-consumer channel rose 112% to $118.8 million. Revenue from third-party channels, which sell Ethos products through independent agencies and partners, jumped 209% to $116.4 million.

Ethos said it was the third straight quarter of revenue growth above 100%.

"Ethos is a business that gets better as it gets bigger," said Peter Colis, the company's CEO and co-founder.

Profitability improves

Adjusted earnings before interest, taxes, depreciation and amortization rose 87% to $35 million, a margin of 15%. The company activated 142,111 policies in the quarter, bringing its cumulative total to more than 850,000.

Executives said operating costs are falling as a share of revenue as the business grows. Chief Financial Officer Christopher Capozzi said operating expenses were about 13% of revenue in the quarter, down from 19% a year earlier.

Not all of the details were positive. Average revenue per policy fell from the previous quarter to $1,655. Capozzi said that was because more policies sold through third parties were whole life products. Higher spending on brand marketing and the shift toward whole life also weighed on blended margins, though the company said newly activated policies became profitable within 60 days.

Guidance raised

Ethos raised its outlook. It now expects 2026 revenue of $838 million to $842 million and adjusted EBITDA of $134 million to $136 million.

The new revenue forecast is well above analysts' earlier expectations. Before the report, the consensus estimate for full-year revenue had been about $735 million, already up from about $568 million three months earlier.

The board approved a stock buyback of up to $100 million of Class A shares during the quarter.

How the business works

Ethos sells term and whole life insurance online. Customers can apply in minutes, often without a medical exam, through a process the company says is faster than traditional underwriting. It describes its mission as making life insurance more accessible.

The company works with insurance carriers that underwrite the policies, earning revenue from policy sales instead of carrying the underwriting risk itself. It has been expanding into juvenile life insurance and annuities.

Volatile trading history

The shares have moved sharply on past earnings reports. After the company's previous report in August, the stock rose about 21% in one day when results beat analyst expectations.

Investors have been watching the company's valuation. Ethos has posted losses on a GAAP basis over the past 12 months, so price-to-earnings ratios are not meaningful for the stock. Analysts have instead compared its price to its revenue, which is above the company's historical average.

Insider selling has also drawn attention. Insiders sold about $99.6 million worth of shares over the past year and bought about $10 million, according to data compiled by GuruFocus.

Analyst view

The average one-year analyst price target before the report was $37.50, according to Yahoo Finance data. Tuesday's price was well above that target, and analysts often revise their targets after a large earnings beat and guidance increase.

What comes next

Analysts will watch whether Ethos can keep growing quickly while protecting margins as it spends more on brand marketing. Investors will also watch how sales shift toward whole life products, which bring in less revenue per policy, and whether the company uses its new buyback authority.

The fourth quarter will show whether Ethos can meet its raised outlook. Its momentum in both direct and third-party channels gives it room to do so, executives said.