Investors in EverQuote, Inc. (NASDAQ:EVER) had a good week, as its shares rose 6.3% to close at US$36.87 following the release of its third-quarter results. Revenues of US$90m beat expectations by a respectable 5.6%, although statutory losses per share increased. EverQuote lost US$0.12, which was 68% more than what the analysts had included in their models. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, EverQuote's eight analysts are now forecasting revenues of US$414.9m in 2021. This would be a sizeable 28% improvement in sales compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to US$0.29. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$409.8m and losses of US$0.12 per share in 2021. So it's pretty clear the analysts have mixed opinions on EverQuote even after this update; although they reconfirmed their revenue numbers, it came at the cost of a per-share losses.
With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 9.5% to US$55.86, with the analysts signalling that growing losses would be a definite concern. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic EverQuote analyst has a price target of US$65.00 per share, while the most pessimistic values it at US$48.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that EverQuote's revenue growth will slow down substantially, with revenues next year expected to grow 28%, compared to a historical growth rate of 36% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 16% next year. So it's pretty clear that, while EverQuote's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at EverQuote. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of EverQuote's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple EverQuote analysts - going out to 2024, and you can see them free on our platform here.
Plus, you should also learn about the 3 warning signs we've spotted with EverQuote .
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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