EverQuote Inc: COVID-19 Helps Fuel 333% Year-Over-Year Gains

COVID-19 Makes EverQuote Stock a Stronger Play

EverQuote Inc (NASDAQ:EVER) was already an amazing tech stock with huge potential heading into 2020. EverQuote stock soared a whopping 725% in 2019 and investors were increasingly optimistic about its near-term and long-term outlooks.

Then COVID-19 happened, which has made EVER stock an even better play.

Home of the largest online marketplace for insurance in the U.S, EverQuote has seen its share price soar since the coronavirus-fueled stock market sell-off in March.

Why? Because of the coronavirus pandemic, an estimated three billion people around the world were shuttered in during the lockdown. That meant many things that had to get done, had to be conducted online. That means virtual companies like EverQuote became the go-to player for consumers. And that should continue.

COVID-19 has decimated some sectors and many businesses that have been unable to adapt. But for savvy businesses that connect with consumers remotely, COVID-19 has been a game-changer, with many companies experiencing astronomical growth.

EVER Stock Overview

Some say there are only two certainties in life: death and taxes. But you could add paying insurance to that list. And you need to pay your insurance even during a pandemic. That’s where EverQuote Inc comes in.

The Cambridge, Massachusetts-based company is the leading online insurance marketplace that connects consumers with insurance providers. It’s just that simple. (Source: “Investor Presentation May 2020,” EverQuote Inc, last accessed July 8, 2020.)

Some of the company’s representative partners are American International Group Inc (NYSE:AIG), Allstate Corp (NYSE:ALL), and Mutual of Omaha Insurance Company.

Chart courtesy of StockCharts.com

EverQuote Inc’s online insurance platform had been growing in popularity even before COVID-19 hit. In 2019 alone, EverQuote stock jumped 725%. It has since recovered from the pandemic-fueled sell-off and has gone on to notch up new records.

Currently trading above $60.00, EVER stock is up 186% since March, 75% year-to-date, 333% year-over-year, and 1,345% since the start of 2019.

Strong Q1 Results & Increased Full-Year Guidance

On May 4, EverQuote announced that its revenue, for the first quarter ended March 31, 2020, increased 56% year-over-year to $81.4 million. (Source: “EverQuote Announces First Quarter 2020 Financial Results,” EverQuote, Inc., May 4, 2020.)

The company’s automotive insurance segment increased 50% to $67.6 million, while revenue from the company’s other insurance verticals (home and renters, health, commercial insurance, etc.) climbed 90% to $13.7 million.

The company reported a first-quarter net loss of $1.4 million, compared to a first-quarter 2019 net loss of $4.4 million. Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) came in at $3.8 million, compared to an adjusted EBITDA loss of $1.3 million in the same prior-year period.

Seth Birnbaum, CEO and co-founder, commented, “We reported strong first quarter results across all of our key financial metrics – delivering revenue growth of 56%, variable marketing margin growth of 72% and positive Adjusted EBITDA.”

Birnbaum added,

During the quarter, we attracted more high-intent consumers with an 80% increase in quote request volume. We remain committed to our mission to be the largest source of online insurance policies, believe the dominant dynamic for our growth is the shift of insurance online and are focused on capitalizing on our significant, expanding market opportunity.

(Source: Ibid.)

For the second quarter of 2020, EverQuote expects to report:

• revenue in the range of $77.0 to $80.0 million, up from $55.7 Million in the second quarter of 2019
• adjusted EBITDA in the range of $3.0 to $4.3 million, up from $1.6 in the second quarter of 2019

For fiscal 2020, EverQuote expects to report:

• Revenue in the range of $318.0 to $327.0 million, up from $248.8 in fiscal 2019 and up from a previous guidance range of $315.0 to $325.0 million
• Adjusted EBITDA in the range of $12.5 to $17.5 million, up from $8.3 million in fiscal 2019 and up from the previous guidance range of $10.0 to $15.0 million

(Sources: Ibid; “EverQuote Announces Second Quarter 2019 Financial Results,” EverQuote Inc, August 5, 2019; and “Investor Presentation May 2020,” EverQuote Inc.)

Analyst Take

Even before the pandemic, EverQuote stock was a no-brainer. And then COVID-19 hit, which has made EverQuote Inc an even more attractive long-term play. The company continues to report strong financial results and it has raised its full-year guidance.

The insurance industry remains healthy, with online consumer and provider demand being strong. Looking ahead, management says COVID-19 will help accelerate the company’s digital platform, improving its long-term prospects.