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Why Is EverQuote (EVER) Down 26.4% Since Last Earnings Report?

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It has been about a month since the last earnings report for EverQuote (EVER). Shares have lost about 26.4% 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 Q1 Loss Lower Than Expected, Revenues Up Y/Y

EverQuote, Inc. incurred a net loss of 19 cents per share in first-quarter 2022, narrower than the Zacks Consensus Estimate of a loss of 26 cents. The bottom line was however wider than the year-ago quarter’s loss of 13 cents per share.

EverQuote witnessed increased revenues from Automotive insurance and Other insurance verticals in the reported quarter, partially offset by higher expenses.

Behind the Headlines

Total revenues of $110.8 million surpassed the Zacks Consensus Estimate by 8.8%. The top line also rose 6.6% year over year, primarily attributable to a strong performance from Automotive insurance and Other insurance verticals.
Revenues in the Automotive insurance vertical were $87.7 million, up 4% year over year. Also, revenues in the Other insurance vertical totaled $23 million, which grew 19% year over year.

Total costs and operating expenses increased 8.1% to $116.4 million, mainly due to higher costs of revenues, sales and marketing, and general and administrative expenses.

EverQuote’s Variable Marketing Margin expanded 9% year over year in the quarter under review to $34.3 million. Adjusted EBITDA was $0.5 million, which decreased 89.9% year over year. Quote requests dropped 49.5% year over year in the quarter under review to $2.4 million.

Financial Update

EverQuote exited the first quarter with cash and cash equivalents of $46.1 million, up 32.4% from the 2021-end level. Total assets were $170.5 million, up 18.7% year over year. Also, total stockholders' equity increased 20.3% to $58.5 million.

Cash used in operations was $3.8 million against cash provided by operations of $35 million in the year-ago quarter.

Q2 Guidance

EVER estimates revenues of $92 - $97 million, variable marketing margin of $24 - $27 million and adjusted EBITDA of ($4) to ($7) million.

2022 Guidance

EverQuote expects revenues of $400 - $420 million, variable marketing margin of $110 - $120 million and adjusted EBITDA of ($5) to ($15) million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -53.28% due to these changes.

VGM Scores

Currently, EverQuote has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

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.

Performance of an Industry Player

EverQuote belongs to the Zacks Insurance - Multi line industry. Another stock from the same industry, The Hartford (HIG), has gained 2.6% over the past month. More than a month has passed since the company reported results for the quarter ended March 2022.

The Hartford reported revenues of $3.61 billion in the last reported quarter, representing a year-over-year change of +7.2%. EPS of $1.66 for the same period compares with $0.56 a year ago.

For the current quarter, The Hartford is expected to post earnings of $1.61 per share, indicating a change of -30.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -2.2% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for The Hartford. Also, the stock has a VGM Score of A.


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