Shares of the online insurance marketplace EverQuote (EVER 2.00%) had dropped by 23.5% at 10:55 a.m. ET today after the company reported earnings results for the first quarter of 2022. The stock also received a downgrade from the Street.
EverQuote in Q1 reported an earnings-per-share loss of $0.19 on total revenue of $110.7 million, which actually beat analyst estimates for the quarter.
EverQuote also provided guidance for the rest of the year, saying the company expects to generate at the midpoint of its range $410 million in revenue, a variable marketing margin of $115 million, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of -$10 million.
This morning, Raymond James analyst Aaron Kessler downgraded the company from an outperform rating to market perform. Kessler maintained his price target at $19 per share, which does provide significant upside from the company's current share price, which is around $11.
"While we are optimistic that auto growth can return to prior growth rates of ~20% in 2023, we expect shares to remain largely range bound until we see the top line recovery as well as improved bottom line leverage," Kessler said in a research note to clients.
On EverQuote's recent earnings call, CEO Jayme Mendal said one of the company's large carrier partners surprisingly told the company it is cutting its customer acquisition budget in the near term due to profitability headwinds. EverQuote is also expecting demand to slow in its healthcare insurance segment.
In this market, investors are likely going to want to see proof that growth in certain segments is resuming before jumping back into the stock.