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Why Is EverQuote (EVER) Up 35.8% Since Last Earnings Report?
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A month has gone by since the last earnings report for EverQuote (EVER - Free Report) . Shares have added about 35.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is EverQuote due for a pullback? 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 drivers.
EverQuote Q1 Earnings Beat on Lower Operating Expenses
EverQuote, Inc. incurred a net loss of 8 cents per share in first-quarter 2023, narrower than the Zacks Consensus Estimate and our estimate of a loss of 19 cents and 20 cents, respectively. The bottom line was also narrower than the year-ago quarter’s loss of 19 cents per share.
Total revenues of $109.2 million beat the Zacks Consensus Estimate by 6.2% and our estimate of $102.5 million. However, the top line declined 1.3% year over year, primarily attributable to a weak performance in the other insurance verticals.
The better-than-expected results reflect improving dynamics of the auto insurance industry. EverQuote’s rising revenues from the Automotive vertical were driven by an increased focus on customer acquisition by a major carrier, which experienced an improved financial performance.
The company’s continued investments in technology drove traffic costs down and ultimately reduced total expenses. However, the persistent instability of the auto insurance market in the early second quarter can hamper the company’s results in the future.
Behind the Headlines
Revenues in the Automotive insurance vertical were $89.7 million, up 2% year over year. The metric beat the Zacks Consensus Estimate by 7.2% and our estimate of $81.8 million. Revenues in the Other insurance vertical totaled $19.5 million, which decreased 15% year over year. The metric missed the consensus mark by 3.9% and our estimate of $20.7 million.
Total costs and operating expenses decreased 4.1% to $111.7 million mainly due to lower costs of revenues, sales and marketing, and research and development.
EverQuote’s Variable Marketing margin increased 4% year over year in the quarter under review to $35.6 million. Adjusted EBITDA was $5.4 million, which increased 125% year over year.
Financial Update
EverQuote exited the first quarter with cash and cash equivalents of $28.8 million, down from $30.8 million at 2022-end. Total assets were $160.4 million, up from $156.5 million at 2022-end. Total stockholders' equity increased 3.9% to $111.6 million. Cash used in operations was $1.2 million compared with $3.8 million in the year-ago quarter.
2Q23 Guidance
EverQuote estimates revenues of $70-$75 million, a variable marketing margin of $23-$26 million and adjusted EBITDA of ($4)-($1) million. The company has withdrawn its full-year guidance due to persistent instability in the auto insurance market.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -34.75% due to these changes.
VGM Scores
Currently, EverQuote has a great Growth Score of A, 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 C. 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, CNO Financial (CNO - Free Report) , has gained 9.1% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.
CNO reported revenues of $1.01 billion in the last reported quarter, representing a year-over-year change of +19.4%. EPS of $0.51 for the same period compares with $0.42 a year ago.
For the current quarter, CNO is expected to post earnings of $0.72 per share, indicating a change of -15.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +5.9% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for CNO. Also, the stock has a VGM Score of B.
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Why Is EverQuote (EVER) Up 35.8% Since Last Earnings Report?
A month has gone by since the last earnings report for EverQuote (EVER - Free Report) . Shares have added about 35.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is EverQuote due for a pullback? 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 drivers.
EverQuote Q1 Earnings Beat on Lower Operating Expenses
EverQuote, Inc. incurred a net loss of 8 cents per share in first-quarter 2023, narrower than the Zacks Consensus Estimate and our estimate of a loss of 19 cents and 20 cents, respectively. The bottom line was also narrower than the year-ago quarter’s loss of 19 cents per share.
Total revenues of $109.2 million beat the Zacks Consensus Estimate by 6.2% and our estimate of $102.5 million. However, the top line declined 1.3% year over year, primarily attributable to a weak performance in the other insurance verticals.
The better-than-expected results reflect improving dynamics of the auto insurance industry. EverQuote’s rising revenues from the Automotive vertical were driven by an increased focus on customer acquisition by a major carrier, which experienced an improved financial performance.
The company’s continued investments in technology drove traffic costs down and ultimately reduced total expenses. However, the persistent instability of the auto insurance market in the early second quarter can hamper the company’s results in the future.
Behind the Headlines
Revenues in the Automotive insurance vertical were $89.7 million, up 2% year over year. The metric beat the Zacks Consensus Estimate by 7.2% and our estimate of $81.8 million. Revenues in the Other insurance vertical totaled $19.5 million, which decreased 15% year over year. The metric missed the consensus mark by 3.9% and our estimate of $20.7 million.
Total costs and operating expenses decreased 4.1% to $111.7 million mainly due to lower costs of revenues, sales and marketing, and research and development.
EverQuote’s Variable Marketing margin increased 4% year over year in the quarter under review to $35.6 million. Adjusted EBITDA was $5.4 million, which increased 125% year over year.
Financial Update
EverQuote exited the first quarter with cash and cash equivalents of $28.8 million, down from $30.8 million at 2022-end. Total assets were $160.4 million, up from $156.5 million at 2022-end. Total stockholders' equity increased 3.9% to $111.6 million. Cash used in operations was $1.2 million compared with $3.8 million in the year-ago quarter.
2Q23 Guidance
EverQuote estimates revenues of $70-$75 million, a variable marketing margin of $23-$26 million and adjusted EBITDA of ($4)-($1) million. The company has withdrawn its full-year guidance due to persistent instability in the auto insurance market.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -34.75% due to these changes.
VGM Scores
Currently, EverQuote has a great Growth Score of A, 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 C. 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, CNO Financial (CNO - Free Report) , has gained 9.1% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.
CNO reported revenues of $1.01 billion in the last reported quarter, representing a year-over-year change of +19.4%. EPS of $0.51 for the same period compares with $0.42 a year ago.
For the current quarter, CNO is expected to post earnings of $0.72 per share, indicating a change of -15.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +5.9% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for CNO. Also, the stock has a VGM Score of B.