EverQuote (EVER) Q2 Earnings Top, Revenues Miss Estimates
EverQuote, Inc. EVER 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.
EverQuote, Inc. Price, Consensus and EPS Surprise
EverQuote, Inc. price-consensus-eps-surprise-chart | EverQuote, Inc. Quote
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.
Zacks Rank
EVER currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
The Travelers Companies TRV reported second-quarter 2023 core income of 6 cents per share, which missed the Zacks Consensus Estimate of $2.27. The bottom line decreased 97.7% year over year, primarily attributable to higher-than-expected catastrophe loss.
Travelers’ total revenues increased 9.8% from the year-ago quarter to $10.1 billion, primarily driven by higher premiums. The top-line figure was almost in line with the Zacks Consensus Estimate.
Net written premiums increased 14% year over year to a record $10.3 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.1 billion.
Travelers witnessed an underwriting gain of $781 million, up 38% year over year, driven by record net earned premiums of $9.2 billion and a consolidated underlying combined ratio, which improved 170 basis points. The combined ratio deteriorated 820 basis points year over year to 106.5 due to higher catastrophe losses and lower net favorable prior-year reserve development, partially offset by a lower underlying combined ratio.
The Progressive Corporation’s PGR second-quarter 2023 earnings per share of 50 cents missed the Zacks Consensus Estimate of 88 cents. The bottom line declined 47.4% year over year.
Net premiums earned grew 19% to $14.5 billion and beat our estimate of $12.9 billion as well as the Zacks Consensus Estimate of $14.3 billion. The combined ratio deteriorated 480 bps from the prior-year quarter’s level to 104.
Policies in force were solid in the Personal Auto segment, increasing 17% from the year-ago month’s figure to 19.7 million. Special Lines improved 7% to 5.8 million.
W.R. Berkley Corporation’s WRB second-quarter 2023 operating income of $1.14 per share beat the Zacks Consensus Estimate by 6.5%. The bottom line increased 1.8% year over year.
Operating revenues came in at $2.9 billion, down 57.4% year over year, on the back of higher net premiums earned as well as higher net investment income. The top line missed the consensus estimate by 1.2%.
W.R. Berkley’s net premiums written were a record $2.8 billion, up 8.7% year over year, as market conditions remained favorable for most lines of business. Our estimate for the same was $2.7 billion.
Catastrophe losses totaled $53.5 million in the quarter. The consolidated combined ratio (a measure of underwriting profitability) deteriorated 100 basis points to 89.6, in line with the Zacks Consensus Estimate. Our estimate for combined ratio was 91.3.
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