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It has been about a month since the last earnings report for EverQuote (EVER). Shares have lost about 24% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is EverQuote due for a breakout? 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 catalysts.
EverQuote Q4 Loss Narrower Than Expected, Revenues Top
EverQuote, Inc. incurred a net loss of 13 cents per share in fourth-quarter 2020, narrower than the Zacks Consensus Estimate of a loss of 14 cents. However, the bottom line was wider than the year-ago quarter’s loss of 4 cents.
EverQuote witnessed increased revenues from automotive insurance and other insurance verticals in the reported quarter, offset by higher expenses.
Behind the Headlines
Total revenues of $97 million surpassed the Zacks Consensus by 5.4%. The top line also soared 31.1% year over year, primarily attributable to a strong performance across the company’s insurance verticals, namely Automotive and Other.
Revenues in the Automotive insurance vertical were $76.2 million, up nearly 27% year over year. Also, revenues in the Other insurance vertical totaled $21.1 million, which grew 55% year over year.
Total costs and operating expenses increased 34.8% to $101 million, mainly due to higher cost of revenues, sales and marketing, research and development, general and administrative expenses, and acquisition-related costs.
The company’s Variable Marketing Margin expanded 46% year over year in the quarter under review to $31.9 million. Adjusted EBITDA was $5.4 million, which grew 28.6% year over year.
Quote requests increased 11.8% year over year in the quarter under review to $6.5 million.
The company exited 2020 with cash and cash equivalents of $42.9 million, down 6.9% from the 2019-end level.Total assets were $129 million, up 41.5% year over year. Also, total liabilities increased 47.2% to $58.1 million. Total stockholders’ equity was $70.9 million, which improved nearly 37.1% from the level at 2019 end.
Total revenues for 2020 improved 39.4% year over year to $346.9 million. Automotive insurance vertical revenues were $283.2 million, up 33.4% from the 2019-end level. Other insurance vertical revenues improved 74.5% year over year to $63.7 million. For 2020, net loss of 41 cents per share was wider than the year-ago loss of 28 cents. Variable Marketing Margin grew 48% year over year to $108.6 million. Adjusted EBITDA totaled $18.4 million, which soared 121.7% year over year.
Following the fourth-quarter results, the company provided an outlook for the first quarter of 2021. EverQuote expects total revenues of $100-$102 million for the March quarter of the ongoing year. The company also anticipates Variable Marketing Margin of $30.5-$31.5 million. Moreover, adjusted EBITDA is expected to be $4-$5 million.
The company expects current-year total revenues of $430-$440 million. Variable Marketing Margin is estimated to be $135-$140 million. Also, adjusted EBITDA is anticipated to be $25-$30 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -57.65% due to these changes.
At this time, EverQuote has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile 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.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, EverQuote has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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