EverQuote (EVER) Up 6.6% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for EverQuote (EVER). Shares have added about 6.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is EverQuote due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
EverQuote Q2 Earnings Top, Revenues Miss Estimates
EverQuote incurred a loss of 31 cents per share in second-quarter 2023, narrower than the Zacks Consensus Estimate of a loss of 33 cents. However, the bottom line was wider than the year-ago quarter’s loss of 12 cents per share.
Total revenues of $68 million missed the Zacks Consensus Estimate by 5%. The top line declined 33.3% year over year, primarily attributable to weak performance in both Automotive and Other insurance verticals.
Given the prolonged auto insurance downturn, EVER undertook some strategic decisions, including restructuring operations, eliminating about 30% of positions company-wide, exiting the health insurance vertical and its associated direct-to-consumer agency (DTCA), and scaling down DTCA serving auto and home insurance markets.
Behind the Headlines
Revenues in the Automotive insurance vertical were $49.7 million, down 39% year over year. The Zacks Consensus Estimate was pegged at $56 million. Our estimate was $56.9 million.
Revenues in the Other insurance vertical totaled $18.2 million, which decreased 151% year over year. The Zacks Consensus Estimate was pegged at $17 million and our estimate was $16 million.
Total costs and operating expenses decreased 23.1% to $81.5 million, mainly due to lower costs of revenues, sales and marketing, general and administrative and research and development. Our estimate was $77.1 million.
EverQuote’s variable marketing margin increased 26% year over year in the quarter under review to $24.7 million. Our estimate was negative $23.3 million.
Adjusted EBITDA was negative $2.1 million versus $1.4 million earned in the year-ago quarter. Our estimate was negative $2.6 million.
Financial Update
EverQuote exited the second quarter with cash and cash equivalents of $28.8 million, down from $30.8 million at 2022-end. Total assets were $145.1 million, down from $156.5 million at 2022-end. Total stockholders' equity decreased 1.8% to $105.5 million.
Cash from operations was $3.3 million in the first half of 2023 versus an outflow of $3.5 million in the year-ago period.
Q3 Guidance
EverQuote estimates revenues of $51-$56 million, a variable marketing margin of $16-$18 million and adjusted EBITDA of ($4)-($6) million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -134.53% due to these changes.
VGM Scores
At this time, EverQuote has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise EverQuote has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
EverQuote is part of the Zacks Insurance - Multi line industry. Over the past month, Everest Group (EG), a stock from the same industry, has gained 4.5%. The company reported its results for the quarter ended June 2023 more than a month ago.
Everest Group reported revenues of $3.65 billion in the last reported quarter, representing a year-over-year change of +18.7%. EPS of $15.21 for the same period compares with $9.79 a year ago.
Everest Group is expected to post earnings of $6.60 per share for the current quarter, representing a year-over-year change of +225%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.8%.
Everest Group has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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EverQuote, Inc. (EVER) : Free Stock Analysis Report
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