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What's in the Cards for EverQuote's (EVER) Q4 Earnings?

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EverQuote, Inc. (EVER - Free Report) is slated to report fourth-quarter 2019 results on Feb 24.

The Zacks Consensus Estimate for the company’s earnings per share is pegged at a loss of 6 cents, indicating an improvement of 60% from the year-ago reported loss. The consensus mark for revenues is pegged at $68.23 million, suggesting a 71.52% surge from the year-earlier reported number.

Let’s see how things shaped up for this announcement.

In the impending quarterly release, we expect to see accelerated revenue growth across multiple verticals with an impressive steady progress in auto insurance vertical and a resurgence of growth in other insurance verticals, which includes home and renters, life and health. The company is adding more providers and expanding its budget with the existing carriers and agents. This, in turn, is also likely to have bumped up overall revenues in the fourth quarter.

The company expects an increase in quote requests on the back of distribution growth and consumer traffic optimization initiatives in the to-be-reported results.

Disciplined execution of the company’s key growth levers might have led to another strong quarter of Variable Marketing Margin (defined as revenues less advertising expense) growth.  We expect the company to have achieved success with consumers and insurance providers by strengthening its investments in proprietary data, automation and machine-learning algorithms.

Additionally, solid data-driven marketplace coupled with improving operating leverage is likely to have driven adjusted EBITDA for the quarter to be reported.

Overall costs and expenses are likely to have risen, mainly due to a huge sum of money spent on sales and marketing.  The company is efficiently carrying out all its key growth strategies, such as expansion of consumer volume, growth in provider coverage and budget, greater customer engagement and addition of verticals, which in turn, might have elevated its operating expenses in the fourth quarter

Guidance

For the fourth quarter, the company expects revenues to be $67-$69 million, adjusted EBITDA between $2 million and $3 million and variable marketing margin between $19 million and $20 million.

For the full year, revenues are anticipated between $242 million and $244 million, variable marketing margin between $70.5 million and $71.5 million and adjusted EBITDA between $6.1 million and $7.1 million.

Earnings Surprise History

The company flaunts an attractive earnings surprise record, having surpassed estimates in each of the trailing four quarters, the average being 84.25%. This is depicted in the chart below:

What Our Quantitative Model Predicts

Our proven model does not predict an earnings beat for EverQuote this time around. The right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that is not the case here.

Earnings ESP: EverQuote has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of 6 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: EverQuote carries a Zacks Rank #3.

EverQuote, Inc. Price and EPS Surprise

Stocks to Consider

Some stocks worth considering with the apt combination of elements to surpass estimates this reporting cycle are as follows:

Magna International Inc. (MGA - Free Report) has an Earnings ESP of +3.34% and a Zacks Rank of 3.

You can see the complete list of today’s Zacks #1 Rank stocks here.

WW International, Inc. (WW - Free Report) has an Earnings ESP of +15.33% and a Zacks Rank #2.

Nevro Corp. (NVRO - Free Report) has an Earnings ESP of +3.45% and a Zacks Rank of 2.

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