EverQuote, Inc. (EVER – Free Report) shares are trading at a premium to the Zacks Multiline Insurance industry. Its price-to-book value of 5.69X is higher than the industry average of 2.3X.
EverQuote, an online insurance marketplace, has a market capitalization of $669 million. The average volume of shares traded in the last three months was 0.5 million.
Image Source: Zacks Investment Research
Shares of other insurers that provide car insurance, such as Lemonade (LMND – Free Report) , The Allstate Corporations (ALL – Free Report) and The Progressive Corporation (PGR – Free Report) , are also trading at multiples higher than the industry average.
EVER: An Outperformer
EVER shares have gained 2.8% in a month, outperforming its industry, sector and the Zacks S&P 500 composite’s return in the same time frame.
EVER vs Industry, Sector & S&P 500 in a Month
Image Source: Zacks Investment Research
EVER shares are trading well above the 50-day moving average, indicating a bullish trend.
EVER’s Return on Capital
Return on equity (ROE) for the trailing 12 months was 13.9%, comparing unfavorably with the industry’s 15.3%. This reflects its efficiency in utilizing shareholders’ funds. It envisions a long-term target of 15%.
ROIC in the trailing 12 months was 13.7%, better than the industry average of 2.4%, reflecting EVER’s efficiency in utilizing funds to generate income.
Factors Favoring EverQuote
Though a prolonged auto insurance downturn weighed on revenues, EverQuote believes it is well poised to benefit from the normalization of auto insurance carrier demand, given auto carrier recovery. Thus, expansion into new verticals, increasing consumer traffic, higher quote request volume and innovating advertiser products and services should help EVER generate an improved top line.
The success of EVER depends on the growth of consumer traffic, as measured by quote requests. EverQuote remains focused on increasing consumer traffic by expanding existing advertising channels and adding new channels. Over the long term, EverQuote intends to increase consumer traffic by leveraging the features and growing data assets of the platform. EverQuote also increased the number of quote requests acquired from its verified partner network.
Variable marketing margin (VMM), one of the primary metrics for managing business, has been improving. A higher volume of quote requests will continue to drive VMM going forward. EVER expects VMM to benefit from strong revenue growth within the health direct-to-consumer agency during the annual health open enrollment period.
EverQuote boasts a debt-free balance sheet with cash balance improving over the last three years.
Optimistic Analyst Sentiment Instills Confidence in EVER
The Zacks Consensus Estimate for 2025 earnings has moved 3 cents north in the past 30 days, reflecting analyst optimism.
The Zacks Consensus Estimate for 2025 earnings is pegged at 80 cents, suggesting an increase of 10.7% on 18.8% higher revenues of $578 million.
EVER has a Growth Score of B.
Average Target Price for EVER Suggests a Solid Upside
Based on short-term price targets offered by six analysts, the Zacks average price target is at $32.17 per share. The average suggests a potential 69.9% upside from Wednesday’s closing price.
Parting Thoughts on EVER Stock
EverQuote should continue to benefit from its exclusive data asset and technology, intensified focus on core P&C markets, streamlined operations and strong financial profile, which poise it for long-term growth. A VGM Score of B instills confidence in the stock.
Despite its premium valuation, it is better to add this Zacks Rank #1 (Strong Buy) stock for better returns. You can see the complete list of today’s Zacks #1 Rank stocks here.
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