EverQuote, Inc. EVER has been gaining momentum, banking on the solid performance of automotive and other insurance marketplace verticals, revenue growth within the health direct-to-consumer agency and higher consumer traffic.
Earnings Surprise History
EverQuote has a decent earnings surprise history. Its bottom line beat estimates in each of the last four quarters, the average being 40.50%.
EverQuote currently carries a Zacks Rank #1 (Strong Buy).
EverQuote's top line has been increasing over the years, owing to the solid performance of automotive and other insurance marketplace verticals. Revenues from automotive insurance providers accounted for 81% of the total revenues for the nine months that ended on Sep 30, 2022.
EverQuote also remains focused on rapidly expanding into new verticals. Non-auto insurance revenues are likely to gain from strong execution in the health insurance vertical and specifically from direct-to-consumer agency policy sales.
Growth in overall consumer quote requests should benefit EverQuote as it reflects the insurer’s success in generating consumer traffic and the potential to increase the share of insurance-shopping consumers.
Variable marketing margin (VMM) is likely to gain from strong revenue growth within the health direct-to-consumer agency during the annual health open enrollment period. This is expected to drive an improvement in VMM operating point for the business.
Increasing consumer traffic, higher quote request volume and innovating advertiser products and services will continue to boost revenues. EverQuote expects revenues to be between $403 million and $408 million in 2022.
Given the stronger-than-expected third-quarter performance and focus on operating efficiencies, for 2022, EVER expects VMM to be between $126 million and $129 million, a 7% increase at the midpoint from the previous guidance between $116 million and $122 million. The insurer also estimates positive adjusted EBITDA between $4 million and $7 million, up from the previous guidance of negative $1 million to negative $7 million.
EverQuote boasts a debt-free balance sheet with cash balance improving over the last three years. The insurer has $35 million available for borrowing under the revolving line of credit and $10 million available for borrowing under the term loan, each with Western Alliance Bank. EverQuote exited the third quarter with cash and cash equivalents of $36.6 million, which increased 5% from the 2021-end level.
In the past year, the stock has lost 21.2% compared with the industry’s decline of 2.2%.
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Other Stocks to Consider
Some other top-ranked stocks from the insurance industry are Kinsale Capital Group, Inc. KNSL, Radian Group Inc. RDN and Allianz SE ALIZY each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average being 15.16%. In the past year, Kinsale Capital has gained 41.9%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings implies a respective year-over-year rise of 27.5% and 21.9%.
Radian Group’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 45.10%.
The Zacks Consensus Estimate for RDN’s 2022 earnings has moved 12.7% north in the past 30 days. In the past year, the insurer has lost 9.9%.
Allianz earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 12.96%. In the past year, the insurer has lost 6.8%.
The Zacks Consensus Estimate for ALIZY’s 2022 and 2023 earnings has moved 4.4% and 3.8% north, respectively, in the past 30 days.
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