Is Goosehead Insurance (GSHD) Now Attractive After A 59% One Year Share Price Slump

• If you are looking at Goosehead Insurance and wondering whether the recent share price puts the stock on sale or still leaves it looking expensive, the starting point is to understand how its current valuation stacks up against its fundamentals.
• The stock last closed at US$42.12, after recent returns of a 6.0% decline over 7 days, a 5.7% decline over 30 days, a 40.0% decline year to date, and a 58.8% decline over the past year. This naturally raises questions about whether sentiment has swung too far.
• Recent coverage has focused on Goosehead Insurance in the context of broader sector moves and shifting expectations around insurance intermediaries. This helps frame why the share price has been under pressure and provides important context before you weigh up whether the current price fairly reflects the company’s prospects and risks.
• On Simply Wall St’s valuation checks, Goosehead Insurance scores 2 out of 6, as shown in its valuation score. The rest of this article will break down what that means across different valuation methods and then finish with a more complete way to think about value that goes beyond just the headline multiples.

Goosehead Insurance scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Goosehead Insurance Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a stock could be worth by projecting its future cash flows and then discounting those back to today’s value. For Goosehead Insurance, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections rather than earnings multiples.

The latest twelve month Free Cash Flow is about $75.7 million. Analyst inputs and Simply Wall St extrapolations project Free Cash Flow ranging from $62 million in 2026 to about $116.9 million in 2035, all in $. These projected amounts are then discounted to reflect the time value of money and risk, resulting in an estimated intrinsic value of about $66.13 per share.

Compared with the recent share price of roughly $42.12, the DCF output implies the stock trades at a 36.3% discount to this intrinsic value. On this cash flow model alone, Goosehead Insurance appears undervalued.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Goosehead Insurance is undervalued by 36.3%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Goosehead Insurance.

Approach 2: Goosehead Insurance Price vs Earnings

For a profitable company, the P/E ratio is a straightforward way to relate what you pay for the stock to the earnings it generates. It helps you see how many dollars investors are currently willing to pay for each dollar of earnings.

What counts as a “normal” or “fair” P/E depends on how the market views a company’s growth potential and risk. Higher expected growth or lower perceived risk can justify a higher P/E, while slower expected growth or higher risk usually lines up with a lower P/E.

Goosehead Insurance currently trades on a P/E of 32.82x. That sits above the Insurance industry average P/E of 11.18x and the peer average of 16.23x, which suggests the stock carries a richer earnings multiple than many of its peers.

Simply Wall St’s “Fair Ratio” estimate for Goosehead Insurance is 17.47x. This is a proprietary P/E level that reflects factors such as earnings growth, profit margins, industry, market cap and company specific risks. Because it blends these elements, the Fair Ratio can be a more tailored benchmark than a simple comparison with industry or peer averages.

Comparing the current P/E of 32.82x with the Fair Ratio of 17.47x points to Goosehead Insurance trading above this calibrated range.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Goosehead Insurance Narrative

Earlier sections showed how DCF and P/E give you a snapshot of value. Narratives take this further by letting you attach a clear story for Goosehead Insurance to your own numbers, linking your view on future revenue, earnings and margins to a Fair Value that you can then compare directly with the current share price to help you judge whether the stock appears attractive or stretched.

On Simply Wall St, Narratives sit inside the Community page and are designed to be easy to use. You can either align with or adjust existing views such as a consensus Fair Value near US$67.58, a more bullish Fair Value around US$118.94 or a more cautious Fair Value around US$52.10, and then see in real time how that story changes as new earnings, news or guidance arrive.

Do you think there's more to the story for Goosehead Insurance? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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