William Blair has designated Ethos Technologies as its top pick in the insurance sector, pointing to what the firm characterizes as strong growth potential and a favorable competitive position in direct-to-consumer life insurance distribution.
The research note underscores Ethos’s effort to reframe life insurance as a product that consumers can buy quickly online, departing from the industry’s traditional, drawn-out, manual sales model. That shift, William Blair says, positions Ethos as a leader in an underdeveloped direct-to-consumer channel.
Even after a sharp short-term share-price advance - the stock roughly doubled over the past month - William Blair considers the valuation attractive. The firm values Ethos at about 16x projected 2027 EV/EBITDA and views the company as trading at a discount to comparable peers while still offering what it calls sector-leading growth potential.
Several factors underpin William Blair’s positive view. The firm highlights Ethos’s differentiated product development capabilities and its role as a brand leader within a direct channel where the company currently holds market share in the low single digits. That low starting point, William Blair says, implies a long runway for expansion.
Marketing investment has ramped materially. Ethos roughly doubled advertising spending through the first half of the year while maintaining consistent unit economics, according to the research. William Blair projects Ethos could deploy roughly $200 million in advertising in 2026, a level that would make it the largest advertiser in the life insurance category.
Revenue trends in third-party channels have accelerated. William Blair notes third-party revenue growth rose to about 90% in the second quarter, and the firm expects momentum to strengthen further to over 100% in the second half of the year. As agent counts increase and wallet share expands, third-party revenue could approach a near-50% mix, the firm says.
Ethos has also begun testing annuities in its direct channel. Management believes the annuities market accessible through that channel could be four to five times the size of its current life insurance opportunity. While William Blair does not expect annuities to be materially contributory in 2026 or likely 2027, the firm views them as a meaningful long-term expansion opportunity, particularly as Ethos aims to build a trusted consumer brand through top-of-funnel marketing and move into higher-value products.
William Blair cautioned on specific risks, flagging lifetime value revenue recognition and concentration among carrier and agency partners as areas of potential vulnerability for Ethos.
Bottom line - William Blair favors Ethos for its direct-to-consumer positioning, aggressive advertising strategy and multi-product optionality, while noting execution and partner concentration risks that could affect outcomes.