Here's Why EverQuote (EVER) Shares Are Attracting Investors Now
EverQuote, Inc. EVER is strategically positioned for growth, leveraging reduced operating expenses, the enhancement of its platform via machine learning and artificial intelligence, and expected recovery in the auto insurance business.
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 28.02%.
Zacks Rank & Price Performance
EVER currently carries a Zacks Rank #2 (Buy). In the past six months, the stock has gained 80.7%, outperforming the industry’s growth of 12.2%.
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Growth Drivers
EVER remains focused on rapidly expanding into new verticals. 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.
The variable marketing margin (VMM) is likely to gain from declining customer acquisition costs and a shift in the revenue mix to local agent networks with higher VMMs. The company expects VMM to benefit 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 the VMM operating point for the business.
EverQuote boasts a debt-free balance sheet with cash balance improving over the last three years. The insurer aims to meet any future debt service obligations with the existing cash and cash equivalents, and cash flows from operations. In its efforts to strengthen its balance sheet and liquidity position, EVER modified the existing loan agreement with Western Alliance Bank. The company has a $25-million undrawn working capital line of credit with Western Alliance Bank, which is available until July 2025.
The company discontinued its health insurance vertical in June 2023 in a bid to reduce expenses and enhance capital efficiencies. Moreover, EVER focused its resources on home and renters’ insurance, whose revenues showed a year-over-year improvement of 51% in the third quarter. This move highlights its ability to generate a good top-line performance from a less troubled segment.
EverQuote's expectation of insurance premium increases and improving the profitability of insurance carriers should fuel its top-line growth in the near future on higher customer acquisition demand. The cost of claims shows signs of stabilization, improving the prospects for EVER and the auto insurance industry.
EVER has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
Other Stocks to Consider
Some other top-ranked stocks from the multi-line insurance industry are Assurant, Inc. AIZ, Everest Group, Ltd. EG and Goosehead Insurance GSHD, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Assurant’s earnings surpassed estimates in each of the last four quarters, delivering an average surprise of 42.38%.
The Zacks Consensus Estimate for AIZ’s 2023 and 2024 earnings implies 30.8% and 3.6% year-over-year growth, respectively. In the past six months, the insurer has gained 25%.
Everest Group’s earnings surpassed estimates in three of the last four quarters and missed in one, delivering an average surprise of 24.50%.
The Zacks Consensus Estimate for EG’s 2023 and 2024 earnings implies 105.32% and 10.98% year-over-year growth, respectively. In the past six months, the insurer has gained 19.3%.
Goosehead Insurance’s earnings surpassed estimates in three of the last four quarters and missed in one, delivering an average surprise of 100.43%.
The Zacks Consensus Estimate for GSHD’s 2023 and 2024 earnings implies 150.9% and 28.2% growth, respectively, on a year-over-year basis. In the past six months, the insurer has gained 24.8%.
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