Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of EverQuote Zoomed Almost 22% Higher Today

By Eric Volkman - May 5, 2020 at 5:52PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

High growth, an estimates-beating quarter, and raised guidance will do that to a stock.

What happened

Online insurance marketplace EverQuote (EVER 1.54%) was a star stock on Tuesday, with its shares leaping 21.5% higher on the day. This followed the release of its results for the first quarter of fiscal 2020, featuring headline numbers that easily beat analyst estimates, and a guidance hike.

Man signing a paper labeled Insurance, with a toy car and a car key sitting on top of it

Image source: Getty Images.

So what

In Q1, EverQuote grew revenue by 56% year over year to $81.4 million. The company posted an adjusted (non-GAAP) net loss, but at $1.4 million ($0.05 per share) it was much narrower than Q1 2019's deficit of nearly $4.4 million. Both headline figures topped analyst expectations.

This was fueled by a 50% rise in revenue for the automotive insurance vertical, but the company is becoming less dependent on that category. Combined, other forms of insurance (such as health and life) rose by 90%.

For the full year, EverQuote is guiding for revenue of $318 million to $327 million; formerly it estimated $315 million to $325 million. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) is now expected to hit $12.5 million to $17.5 million (previously $10 million to $15 million).

The company's annual revenue in 2019 was nearly $249 million, while adjusted EBITDA came in at $8.3 million.

Now what

EverQuote clearly knows how to attract customers and bring in revenue; that Q1 growth figure was impressive, and while the rate might come down, it seems there's plenty of fuel left in the tank. This feels like a company that has found its niche, and will remain a compelling growth story.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

EverQuote, Inc. Stock Quote
EverQuote, Inc.
$10.52 (1.54%) $0.16

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.