EverQuote Inc. EVER has gained momentum, driven by solid performance in the auto and other insurance market segments, direct-to-consumer healthcare agency revenue growth and higher consumer traffic.
Earning surprise history
EverQuote has quite a history of revenue surprises. The result beat estimates in each of the last four quarters, averaging 40.50%.
EverQuote currently has a Zacks Rank #1 (Strong Buy).
EverQuote’s revenue has grown over the years, thanks to the solid performance of the auto and other insurance industries. Revenue from auto insurance providers accounted for 81% of total revenue for the nine months ended September 30, 2022.
EverQuote also remains focused on rapidly expanding into new industries. Non-automotive revenues are likely to benefit from strong execution in the health insurance industry and, in particular, direct sales of policies by agencies to consumers.
Growth in overall consumer quote requests should benefit EverQuote as it reflects the insurer’s success in generating consumer traffic and its potential to increase the share of consumers buying insurance.
Variable marketing margin (VMM) is likely to benefit from strong revenue growth within the healthcare direct-to-consumer agency during the annual healthcare open enrollment period. This is expected to improve the VMM operating point for the company.
Growing consumer traffic, higher quote requests and innovating advertisers’ products and services will continue to drive revenue. EverQuote expects revenue to be between $403 million and $408 million in 2022.
Given the stronger-than-expected Q3 performance and focus on operational efficiency, EVER expects VMM to be between $126 million and $129 million for 2022, a 7% midway increase from its previous guidance of $116 million and $122 million. The insurer also estimates positive adjusted EBITDA of between $4 million and $7 million, up from its previous guidance of negative $1 million to negative $7 million.
EverQuote has a debt-free balance sheet with an improving cash balance over the past three years. The insurer has $35 million available to borrow under the revolving credit line and $10 million available to borrow under the term loan, each with Western Alliance Bank. EverQuote exited the third quarter with cash and cash equivalents of $36.6 million, up 5% from its 2021 closing level.
Over the past year, the stock lost 21.2% compared to the industry’s 2.2% decline.
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Other stocks to consider
Some other top insurance stocks are Kinsale Capital Group, Inc. KNSL, Radian Group Inc. RDN and Alliance SE ALIZY each with a Zacks Rank #2 (Buy). You can view the full list of current Zacks #1 Rank stocks here.
Kinsale Capital’s earnings beat estimates in each of the last four quarters, averaging 15.16%. In the past year, Kinsale Capital has gained 41.9%.
Zacks’ consensus estimate for the KNSL’s revenues for 2022 and 2023 implies a year-over-year increase of 27.5% and 21.9%, respectively.
Radian Group’s revenue topped estimates in each of the last four quarters, with an average earnings surprise of 45.10%.
Zacks’ consensus estimate for RDN’s 2022 revenue has moved north by 12.7% over the past 30 days. Last year the insurer lost 9.9%.
Allianz earnings beat estimates in each of the last four quarters, with an average earnings surprise of 12.96%. Last year, the insurer lost 6.8%.
Zacks’ consensus estimate for ALIZY’s revenues for 2022 and 2023 has moved northward 4.4% and 3.8%, respectively, in the past 30 days.
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