Will the legal costs associated with defending the lawsuit materially affect the company’s operating expenses?

Answer

The pending securities‑class‑action against SelectQuote, Inc. (NYSE: SLQT) is still in its early investigative stage, and the filing itself does not disclose the size of the legal defense budget. Historically, even protracted securities lawsuits tend to generate legal‑expense line items that are modest relative to a company’s total operating costs—usually a few percentage points of SG&A. SelectQuote’s FY‑2024 operating expenses were roughly $45 million, while the company’s cash‑flow generation and balance‑sheet strength remain solid. Unless the case escalates to a multi‑year trial with a large settlement demand, the incremental legal spend is unlikely to be material enough to move the “operating‑expenses” line in any meaningful way.

From a market‑dynamic perspective, the lawsuit introduces a short‑term downside bias: investors may price‑in a risk premium, leading to modest pressure on the stock (the 2‑week chart shows SLQT trading near the lower end of its recent $12‑$15 range, with the 20‑day SMA still above price). However, the absence of a disclosed cost impact means the risk is more event‑driven than structural. Until the firm releases a specific estimate—typically via a 10‑K or a press release—traders can treat the legal exposure as a non‑material, low‑impact factor on operating expenses, focusing instead on the company’s core fundamentals (stable revenue from its insurance‑lead generation platform) and technical support at the 20‑day SMA.

Trading implication:

- Maintain a neutral‑to‑light‑short stance until more details emerge.

- Watch for any SEC filing or earnings call disclosure that quantifies legal spend; a surprise large expense could trigger a sharper sell‑off.

- In the meantime, the stock’s price action is more driven by broader market sentiment and the company’s operating performance than by the lawsuit’s legal‑cost component.