Citi analyst Ronald Josey has placed life insurance technology company Ethos Technologies Inc (LIFE) at the head of his SMID cap list following a second-quarter performance that significantly exceeded forecasts. The firm reported rapid activation growth across channels, revenue well above consensus, and an upgraded outlook for 2026.
Quarterly operating results
Ethos reported that activated policies expanded by 133% year-over-year in the quarter. Net activated policies increased by 107,800 during the period, a figure that the analyst described as roughly 78% higher than his prior projections. Company management attributed the acceleration to contributions from both direct-to-consumer and third-party distribution channels.
Revenue for the quarter reached $189.6 million, representing a 113% increase from the year-ago period and coming in about 62% above consensus estimates. The direct-to-consumer business recorded revenue of $116.5 million, up 131% year-over-year, while third-party revenue rose 90% to $73.1 million. Josey highlighted product enhancements, improved user experience, and higher conversion rates as factors supporting the top-line gains.
Marketing and channel dynamics
Despite more than doubling its advertising spend in the quarter, Ethos maintained strong advertising return on ad spend, according to Josey. The analyst also noted that third-party agency partners are increasingly utilizing the platform to sell more policies per agent, a development he described as evidence of a strengthening operational flywheel.
Guidance and profitability outlook
Following the results, Ethos increased its 2026 revenue guidance by approximately 29.5%, setting a range of $727 million to $731 million, which Josey notes is about 29% above consensus. The company also raised its 2026 adjusted EBITDA guidance by roughly 15%, to a range of $119 million to $123 million.
Market reaction and analyst moves
Shares of Ethos rose 16% in after-hours trading to $26.20 after the announcement. In response to the stronger-than-expected quarter, Josey lifted his price target to $33 from $27 and retained a Buy rating on the stock, while assigning a High Risk designation. He cited the sustained increase in activated policies, consistent advertising returns, and growing confidence in Ethos’ ability to scale profitable growth as reasons for the rating and target adjustment.
Other firms also revised their outlooks after the earnings release. Goldman Sachs raised its price target to $35, while Citizens moved its target to $33, reflecting broader market reassessment of Ethos’ growth momentum.
Concluding assessment
Citi’s top SMID-cap pick highlights Ethos’ rapid policy activation growth, robust revenue expansion, and upgraded 2026 guidance. While the company reported strong operational progress across direct and third-party channels, the High Risk designation remains part of the analyst’s framework for assessing the stock.