What Happened?
Shares of online insurance comparison site EverQuote (NASDAQ: EVER) fell 7.3% in the afternoon session after the company issued disappointing third-quarter guidance that signaled a significant growth slowdown, overshadowing an otherwise strong quarterly report.
The online insurance marketplace reported a 34% year-over-year revenue jump and record net income for its second quarter. EverQuote also announced a new $50 million share repurchase program. However, investors looked past these positives and focused on the future. The company projected third-quarter revenue that represented only 15% year-over-year growth at the midpoint, a sharp deceleration. This outlook was compounded by second-quarter revenue that slightly missed analyst expectations, which ended a six-quarter streak of revenue beats. Following the report, JPMorgan trimmed its price target on the shares.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy EverQuote? Access our full analysis report here, it’s free.
What Is The Market Telling Us
EverQuote’s shares are extremely volatile and have had 31 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock gained 31.5% on the news that the company reported a standout Q4 2024 result, with revenue and EBITDA significantly crushing Wall Street's estimates. Sales soared 165% compared to the previous year, fueled by a considerable rebound in the automotive insurance segment, which more than tripled. This sharp recovery highlights improving industry conditions and the company's ability to capitalize. On the profitability side, things looked even better. Adjusted EBITDA hit $18.9 million, flipping from a loss last year, thanks to strong margin expansion. Looking ahead, the company's first-quarter EBITDA guidance significantly exceeds analyst expectations, with a projected midpoint growth of 163% relative to the previous year. Zooming out, this was a solid quarter, marked by rapid growth, improved profitability, and strong guidance.
EverQuote is up 19.4% since the beginning of the year, but at $24.18 per share, it is still trading 18.6% below its 52-week high of $29.71 from March 2025. Investors who bought $1,000 worth of EverQuote’s shares 5 years ago would now be looking at an investment worth $579.88.
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