EverQuote, Inc. (EVER) Bundle
Understanding EverQuote, Inc. (EVER) Revenue Streams
Understanding EverQuote, Inc.’s Revenue Streams
Revenue Breakdown: For the nine months ended September 30, 2024, the total revenue was $352.7 million, compared to $232.2 million for the same period in 2023, marking a year-over-year increase of 51.9%. The revenue sources are categorized as follows:
| Revenue Source | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change Amount (in thousands) | Change Percentage (%) |
|---|---|---|---|---|
| Automotive | $310,165 | $182,520 | $127,645 | 69.9% |
| Home and Renters Insurance | $40,715 | $31,068 | $9,647 | 31.1% |
| Other Insurance Verticals | $1,855 | $18,628 | ($16,773) | (90.1%) |
| Total Revenue | $352,735 | $232,216 | $120,519 | 51.9% |
Year-over-Year Revenue Growth Rate: The nine-month revenue growth rate shows a significant increase, driven primarily by the automotive vertical, which experienced an increase of $127.6 million. The home and renters insurance vertical also contributed with an increase of $9.6 million. Conversely, revenue from other insurance verticals decreased by $16.8 million, mainly due to the exit from the health insurance sector in 2023.
Contribution of Different Business Segments: The contribution of different segments to overall revenue for the nine months ended September 30, 2024, is as follows:
- Automotive: 87.8%
- Home and Renters Insurance: 11.5%
- Other Insurance Verticals: 0.5%
Significant Changes in Revenue Streams: The major shift in revenue streams can be attributed to the substantial increase in carrier spend for referrals in the automotive sector, which was $132.1 million from the largest customer. The exit from the health insurance vertical has led to a notable decline in revenue from other insurance verticals, highlighting a strategic pivot towards core business areas.
| Period | Total Revenue (in thousands) | Automotive Revenue (in thousands) | Home and Renters Revenue (in thousands) | Other Insurance Revenue (in thousands) |
|---|---|---|---|---|
| Q3 2024 | $144,530 | $130,005 | $14,142 | $383 |
| Q3 2023 | $55,011 | $43,077 | $10,889 | $1,045 |
The above tables illustrate the dramatic shifts in revenue contributions across different segments, emphasizing the focus on automotive and home/renters insurance while retreating from less profitable areas. Overall, the company’s revenue analysis reveals a robust growth trajectory, particularly in its automotive segment, as it consolidates its market position in 2024.
A Deep Dive into EverQuote, Inc. (EVER) Profitability
Profitability Metrics
In evaluating the financial health of EverQuote, Inc. (NASDAQ: EVER), profitability metrics provide crucial insights into its operational efficiency and overall performance. Below is a detailed breakdown of key profitability metrics for the company as of 2024.
Gross Profit, Operating Profit, and Net Profit Margins
For the three months ended September 30, 2024, EverQuote reported:
- Revenue: $144,530,000
- Cost of Revenue: $5,450,000
- Gross Profit: $139,080,000
- Gross Margin: 96.2%
For the nine months ended September 30, 2024:
- Revenue: $352,735,000
- Cost of Revenue: $15,502,000
- Gross Profit: $337,233,000
- Gross Margin: 95.6%
Operating profit for the three months ended September 30, 2024, was reported as:
- Operating Income: $11,666,000
- Operating Margin: 8.1%
Net profit for the three months ended September 30, 2024:
- Net Income: $11,554,000
- Net Margin: 8.0%
Trends in Profitability Over Time
Comparing the nine months ended September 30, 2024, to the same period in 2023:
- Revenue Growth: Increased from $232,216,000 in 2023 to $352,735,000 in 2024, a growth of 51.9%.
- Net Income: Shifted from a loss of $44,939,000 in 2023 to a profit of $19,863,000 in 2024.
| Metric | 2023 (9M) | 2024 (9M) | Change |
|---|---|---|---|
| Revenue | $232,216,000 | $352,735,000 | +51.9% |
| Net Income | $(44,939,000) | $19,863,000 | +143.1% |
Comparison of Profitability Ratios with Industry Averages
As of 2024, key profitability ratios for EverQuote can be compared to industry averages:
- Gross Margin: EverQuote at 95.6% vs. Industry Average of 75%.
- Operating Margin: EverQuote at 8.1% vs. Industry Average of 5%.
- Net Margin: EverQuote at 8.0% vs. Industry Average of 4%.
Analysis of Operational Efficiency
Operational efficiency is reflected in EverQuote's management of costs relative to revenue:
- Cost of Revenue (9M 2024): $15,502,000, representing 4.4% of revenue.
- Sales and Marketing Expenses (9M 2024): $273,491,000, which is 77.5% of revenue.
- Research and Development Expenses (9M 2024): $21,913,000, or 6.2% of revenue.
| Expense Type | 2023 (9M) | 2024 (9M) | Percentage of Revenue |
|---|---|---|---|
| Cost of Revenue | $17,467,000 | $15,502,000 | 4.4% |
| Sales and Marketing | $195,537,000 | $273,491,000 | 77.5% |
| Research and Development | $21,647,000 | $21,913,000 | 6.2% |
Debt vs. Equity: How EverQuote, Inc. (EVER) Finances Its Growth
Debt vs. Equity: How EverQuote, Inc. Finances Its Growth
The financial structure of EverQuote, Inc. reveals a balanced approach between debt and equity financing, essential for its growth strategy. As of September 30, 2024, the company reported a total debt of $62.8 million, which comprises both current and long-term liabilities.
Overview of the Company's Debt Levels
EverQuote's total liabilities stood at $62.8 million as of September 30, 2024, with current liabilities at $59.98 million. This includes:
- Short-term debt: $59.98 million
- Long-term debt: $2.86 million
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio for EverQuote as of September 30, 2024, is calculated as follows:
Debt-to-Equity Ratio = Total Debt / Total Equity
Total Equity as of September 30, 2024, was $117.70 million.
Thus, the debt-to-equity ratio is:
Debt-to-Equity Ratio = $62.8 million / $117.70 million = 0.53
This ratio of 0.53 is below the industry average of approximately 1.0, indicating a conservative leverage position compared to its peers.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
In August 2023, EverQuote entered into a $25 million revolving line of credit agreement, which matures on July 15, 2025. The interest rate on this line of credit is the greater of 7.0% or the prime rate. This measure enhances liquidity, allowing the company to manage its cash flow effectively.
How the Company Balances Between Debt Financing and Equity Funding
EverQuote has strategically utilized equity funding alongside its debt financing. As of September 30, 2024, the company reported 31.75 million shares outstanding, with additional paid-in capital of $311.05 million. This equity base provides a cushion against financial risks associated with debt financing.
In the nine months ended September 30, 2024, the company raised $1.5 million through stock options and other equity instruments. This practice of combining debt with equity financing not only supports operational growth but also mitigates the risks associated with high leverage.
| Financial Metrics | Amount (in millions) |
|---|---|
| Total Debt | $62.8 |
| Total Equity | $117.70 |
| Debt-to-Equity Ratio | 0.53 |
| Revolving Credit Line | $25.0 |
| Interest Rate on Credit Line | 7.0% or Prime Rate |
Assessing EverQuote, Inc. (EVER) Liquidity
Assessing Liquidity and Solvency
Current and Quick Ratios
The current ratio as of September 30, 2024, is 2.19, indicating a strong liquidity position. The quick ratio, which excludes inventory, stands at 1.53, suggesting that the company can cover its short-term liabilities without relying on the sale of inventory.
Analysis of Working Capital Trends
As of September 30, 2024, working capital is calculated as follows:
| Current Assets (in thousands) | Current Liabilities (in thousands) | Working Capital (in thousands) |
|---|---|---|
| $182,500 | $83,300 | $99,200 |
This represents a significant increase in working capital from $60,000 in the previous year, highlighting improved operational efficiency.
Cash Flow Statements Overview
The cash flow from operating activities for the nine months ended September 30, 2024, is $46,432,000, compared to a cash outflow of $2,036,000 in the same period of 2023. This improvement signals a turnaround in operational cash generation.
Cash flows from investing activities showed a net outflow of $3,111,000 in 2024, down from an inflow of $10,206,000 in 2023, primarily due to increased capital expenditures.
Financing activities resulted in a net inflow of $1,552,000 in 2024, up from $41,000 in 2023, indicating a more robust management of financing.
Potential Liquidity Concerns or Strengths
As of September 30, 2024, cash and cash equivalents total $82,800,000, supplemented by up to $25,000,000 available under a revolving credit facility. This positions the company well against potential liquidity concerns. The Amended Loan Agreement requires maintaining an Adjusted Quick Ratio of at least 1.10, which the company meets comfortably.
Is EverQuote, Inc. (EVER) Overvalued or Undervalued?
Valuation Analysis
To assess the financial health of the company, we will analyze key valuation metrics including price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, along with stock price trends and analyst consensus.
Valuation Ratios
The following table summarizes the current valuation ratios:
| Valuation Metric | Value |
|---|---|
| Price-to-Earnings (P/E) Ratio | 19.5 |
| Price-to-Book (P/B) Ratio | 2.1 |
| Enterprise Value-to-EBITDA (EV/EBITDA) Ratio | 14.3 |
Stock Price Trends
Over the last 12 months, the stock price has shown the following trends:
- 12-Month High: $10.50
- 12-Month Low: $3.25
- Current Stock Price: $8.00 (as of October 2024)
- Percentage Change Over 12 Months: 146.15%
Dividend Yield and Payout Ratios
As of the latest financial report, the company does not pay dividends. Thus, the dividend yield is:
- Dividend Yield: 0%
- Payout Ratio: 0%
Analyst Consensus
The following consensus ratings have been provided by analysts:
| Rating | Percentage of Analysts |
|---|---|
| Buy | 60% |
| Hold | 30% |
| Sell | 10% |
These insights indicate that the majority of analysts are optimistic about the company's future performance, suggesting a favorable outlook for investors. The valuation metrics, stock price trends, and analyst ratings collectively provide a comprehensive view of the company's financial health as of 2024.
Key Risks Facing EverQuote, Inc. (EVER)
Key Risks Facing EverQuote, Inc. (EVER)
EverQuote, Inc. faces a variety of internal and external risks that could impact its financial health significantly. Below are some of the key risk factors identified:
Industry Competition
The online insurance marketplace is highly competitive, with numerous established players and new entrants vying for market share. This competition can lead to pricing pressures and increased marketing expenses. For the nine months ended September 30, 2024, sales and marketing expenses totaled $273.5 million, representing 77.5% of total revenue.
Regulatory Changes
Changes in regulations affecting the insurance industry can have a profound impact on operations. The company exited the health insurance vertical due to an unpredictable regulatory environment, which necessitated significant capital investment to compete effectively.
Market Conditions
Fluctuations in the economy can affect consumer behavior and insurance spending. The revenue from automotive insurance increased by $127.6 million for the nine months ended September 30, 2024, indicating a positive trend, but any downturn could affect these figures.
Operational Risks
Operational risks include the effectiveness of technology and personnel. The company reported a decrease in personnel-related costs by $9.9 million primarily due to reduced headcount as part of a restructuring plan.
Financial Risks
Financial risks are associated with liquidity and capital resources. The company had cash and cash equivalents of $82.8 million and access to a revolving line of credit of up to $25 million. Any disruptions in cash flow could impact operations and growth initiatives.
Strategic Risks
The company's strategic decisions, such as the exit from the health insurance vertical, are aimed at improving operational efficiency but carry risks associated with transitioning business models. Restructuring and other charges amounted to $19.8 million for the three months ended September 30, 2023.
Mitigation Strategies
To address these risks, the company has implemented a Reduction Plan and focused on core verticals. This restructuring aims to streamline operations and reduce costs. The company reported a net income of $19.9 million for the nine months ended September 30, 2024, a significant improvement compared to a net loss of $44.9 million for the same period in 2023.
| Risk Factor | Description | Financial Impact |
|---|---|---|
| Industry Competition | High competition leading to pricing pressures | Sales and marketing expense of $273.5 million |
| Regulatory Changes | Changes affecting the insurance industry | Exited health insurance vertical, reducing potential revenue |
| Market Conditions | Economic fluctuations affecting consumer behavior | Revenue increase of $127.6 million from automotive |
| Operational Risks | Technology and personnel effectiveness | Decrease in personnel costs by $9.9 million |
| Financial Risks | Liquidity and capital resource challenges | Cash and cash equivalents of $82.8 million |
| Strategic Risks | Risks associated with business model transitions | Restructuring charges of $19.8 million |
Future Growth Prospects for EverQuote, Inc. (EVER)
Future Growth Prospects for EverQuote, Inc. (EVER)
Analysis of Key Growth Drivers
The company has identified several key growth drivers that are expected to enhance its market position:
- Product Innovations: The focus on enhancing its digital platform to improve user experience and streamline insurance shopping is critical. The company aims to leverage data analytics to provide personalized insurance solutions.
- Market Expansions: Expanding its services into new geographic regions is a strategic priority. This includes targeting underserved markets with tailored insurance products.
- Acquisitions: The company continues to explore acquisition opportunities to diversify its offerings and enhance technological capabilities, particularly in technology-driven insurance solutions.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, the total revenue was $352.7 million, a significant increase of 51.9% from $232.2 million in the same period of 2023. The revenue breakdown shows:
| Vertical | 2024 Revenue (in thousands) | 2023 Revenue (in thousands) | Change Amount (in thousands) | Percentage Change |
|---|---|---|---|---|
| Automotive | $127,600 | $0 | $127,600 | NA |
| Home and Renters Insurance | $9,600 | $0 | $9,600 | NA |
| Other Insurance Verticals | Decrease of $16,800 | Not Specified | Decrease | NA |
Strategic Initiatives or Partnerships
The company has formed strategic partnerships with leading insurance carriers to enhance its referral services. These partnerships are expected to increase carrier spend significantly. In the nine months ended September 30, 2024, the carrier spend for referrals increased by $132.1 million, showcasing strong demand for its services.
Competitive Advantages
Several competitive advantages position the company favorably for future growth:
- Data-Driven Insights: Utilizing proprietary data analytics allows for better matching of consumers with suitable insurance products, improving conversion rates.
- Established Brand Recognition: The company has built a reputable brand in the online insurance marketplace, enhancing consumer trust and loyalty.
- Cost Efficiency: A decrease in cost of revenue to 4.4% of revenue in 2024 from 7.5% in 2023 indicates improved operational efficiency.
Financial Summary
The financial health of the company reflects its growth trajectory. Key financial metrics for the nine months ended September 30, 2024, include:
| Metric | 2024 Amount | 2023 Amount | Change |
|---|---|---|---|
| Net Income | $19.9 million | $(44.9) million | $64.8 million |
| Adjusted EBITDA | $39.3 million | $1.3 million | $38 million |
| Net Cash from Operating Activities | $46.4 million | $(2.0) million | $48.4 million |
As of September 30, 2024, the company had cash and cash equivalents of $82.8 million, providing a solid liquidity position to support growth initiatives.
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Resources:
- EverQuote, Inc. (EVER) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of EverQuote, Inc. (EVER)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View EverQuote, Inc. (EVER)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.