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EverQuote (EVER) Rallies 137.7% in a Year: More Room to Run?
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EverQuote, Inc.’s (EVER - Free Report) shares have rallied 137.7% in a year compared with the industry's growth of 12.2%. The Finance sector and the Zacks S&P 500 composite have risen 15.1% and 22.4%, respectively, in the same time frame. With a market capitalization of $643.51 million, the average volume of shares traded in the last three months was 0.39 million.
Image Source: Zacks Investment Research
The rally was largely driven by reduced operating expenses, the enhancement of its platform via machine learning and artificial intelligence, and expected recovery in the auto insurance business.
Will the Bull Run Continue?
The Zacks Consensus Estimate for EVER’s 2024 earnings per share indicates a year-over-year increase of 72.1% from the consensus estimate of 2023. The consensus estimate for revenues is pegged at $317.72 million, implying a year-over-year improvement of 10.3% from the consensus mark of 2023.
The consensus estimate for 2025 earnings per share indicates a year-over-year increase of 53% from the consensus estimate of 2024. The consensus estimate for 2025 revenues is pinned at $385.42 million, implying a year-over-year improvement of 21.3% from the consensus mark of 2024.
This Zacks Rank #2 (Buy) multi-line insurer surpassed earnings estimates in each of the last four quarters, the average being 36.78%.
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 expects VMM in the first quarter of 2024 between $26 million and $28 million.
EVER 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, the insurer 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. Revenues from the same 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.
The Zacks Consensus Estimate for Erie Indemnity’s 2024 and 2025 earnings implies year-over-year growth of 18.2% and 12.2%, respectively, from the consensus estimate of the corresponding years.
ERIE’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and missed in one, the average being 11.24%. Shares of ERIE have rallied 59.6% in the past year.
The Zacks Consensus Estimate for Ryan Specialty’s 2024 and 2025 earnings implies year-over-year growth of 28.2% and 20.3%, respectively, from the consensus estimate of the corresponding years.
RYAN’s earnings surpassed the Zacks Consensus Estimate in two of the last four quarters and matched in the other two, the average being 5.05%. Its shares have gained 22.3% in the past year.
Palomar Holdings has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 11.12%. In the past year, shares of PLMR have soared 46.1%.
The Zacks Consensus Estimate for PLMR’s 2024 and 2025 earnings implies year-over-year growth of 16.2% and 18%, respectively, from the consensus estimate of the corresponding years.
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EverQuote (EVER) Rallies 137.7% in a Year: More Room to Run?
EverQuote, Inc.’s (EVER - Free Report) shares have rallied 137.7% in a year compared with the industry's growth of 12.2%. The Finance sector and the Zacks S&P 500 composite have risen 15.1% and 22.4%, respectively, in the same time frame. With a market capitalization of $643.51 million, the average volume of shares traded in the last three months was 0.39 million.
Image Source: Zacks Investment Research
The rally was largely driven by reduced operating expenses, the enhancement of its platform via machine learning and artificial intelligence, and expected recovery in the auto insurance business.
Will the Bull Run Continue?
The Zacks Consensus Estimate for EVER’s 2024 earnings per share indicates a year-over-year increase of 72.1% from the consensus estimate of 2023. The consensus estimate for revenues is pegged at $317.72 million, implying a year-over-year improvement of 10.3% from the consensus mark of 2023.
The consensus estimate for 2025 earnings per share indicates a year-over-year increase of 53% from the consensus estimate of 2024. The consensus estimate for 2025 revenues is pinned at $385.42 million, implying a year-over-year improvement of 21.3% from the consensus mark of 2024.
This Zacks Rank #2 (Buy) multi-line insurer surpassed earnings estimates in each of the last four quarters, the average being 36.78%.
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 expects VMM in the first quarter of 2024 between $26 million and $28 million.
EVER 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, the insurer 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. Revenues from the same 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.
Other Stocks to Consider
Some other top-ranked stocks from the insurance industry are Erie Indemnity Company (ERIE - Free Report) , Ryan Specialty Holdings Inc.(RYAN - Free Report) and Palomar Holdings, Inc. (PLMR - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Erie Indemnity’s 2024 and 2025 earnings implies year-over-year growth of 18.2% and 12.2%, respectively, from the consensus estimate of the corresponding years.
ERIE’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and missed in one, the average being 11.24%. Shares of ERIE have rallied 59.6% in the past year.
The Zacks Consensus Estimate for Ryan Specialty’s 2024 and 2025 earnings implies year-over-year growth of 28.2% and 20.3%, respectively, from the consensus estimate of the corresponding years.
RYAN’s earnings surpassed the Zacks Consensus Estimate in two of the last four quarters and matched in the other two, the average being 5.05%. Its shares have gained 22.3% in the past year.
Palomar Holdings has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 11.12%. In the past year, shares of PLMR have soared 46.1%.
The Zacks Consensus Estimate for PLMR’s 2024 and 2025 earnings implies year-over-year growth of 16.2% and 18%, respectively, from the consensus estimate of the corresponding years.