Ethos Technologies Named Top Insurance Pick by William Blair on Growth Outlook

William Blair has identified Ethos Technologies as its top selection in the insurance sector, highlighting the company's leadership in transforming the direct-to-consumer life insurance space and its considerable potential for future growth.

Rationale for the 'Top Pick' Rating

According to the investment firm, Ethos stands out for its ability to convert the traditionally lengthy, manual process of buying life insurance into a quick online transaction. William Blair noted that despite the stock roughly doubling over the past month, its valuation remains compelling.

The firm's analysis points to several key strengths:

• Valuation: The stock trades at 16x 2027 EV/EBITDA, which William Blair views as a discount to comparable companies, especially given its sector-leading growth potential.
• Market Position: Ethos is considered the brand leader in the underdeveloped direct-to-consumer channel.
• Growth Runway: With its current market share in the low single digits, the company has a long runway for expansion.

Accelerating Growth and New Markets

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William Blair highlighted Ethos's accelerating financial performance. The company's third-party revenue growth hit 90% in the second quarter, with momentum expected to strengthen to over 100% in the second half of the year. The firm believes the third-party revenue mix could approach 50% as its agent base and wallet share increase.

Ethos has also significantly increased its marketing efforts, doubling its advertising spend in the first half of the year while maintaining consistent unit economics. William Blair estimates Ethos could spend approximately $200 million on advertising in 2026, positioning it as the largest advertiser in the life insurance industry. Looking ahead, the company has begun testing annuities, a market management believes could be four to five times larger than life insurance, presenting a significant long-term growth opportunity.

Noted Risks

While optimistic, William Blair also pointed to potential risks for investors to consider. These include the complexities of lifetime value revenue recognition and the company's concentration among its carrier and agency partners.