What Happened?
Shares of online insurance comparison site EverQuote (NASDAQ: EVER) fell 10.9% in the afternoon session after fears of industry disruption were sparked by the launch of an artificial intelligence tool from competitor Insurify, an online insurance shopping platform. The broader US insurance broker sector experienced a downturn as the new tool stoked concerns about the industry's future. The introduction of this AI technology raised questions among investors about its potential to change how the insurance market operates. This uncertainty led to a negative reaction for companies within the sector, reflecting worries that existing business models could face significant challenges.
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What Is The Market Telling Us
EverQuote’s shares are very volatile and have had 26 moves greater than 5% over the last year. But moves this big are rare even for EverQuote and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 22 days ago when the stock dropped 2.6% on the news that the U.S. announced potential tariffs on several European countries. The sell-off was a reaction to news that the White House planned to impose a 10% tariff on imports from eight European nations, including France, Germany, and the United Kingdom, starting February 1. Reports indicated the tariffs were intended to pressure Denmark over the potential sale of Greenland to the U.S. and could rise to 25% if a deal was not reached. The announcement caused a significant downturn in U.S. stocks, with the S&P 500 and Dow Jones falling more than 1.4% as investors returned from a holiday weekend and reacted to the heightened trade uncertainty. The downturn was further exacerbated by a spike in Treasury yields. Higher rates particularly hurt growth stocks such as tech names since investors must discount financials further out in the future back to the present.
EverQuote is down 42% since the beginning of the year, and at $14.75 per share, it is trading 50.4% 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 $295.77.
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