Shares of EverQuote, Inc. (EVER) declined 5.4% in extended trade on Monday after the company announced lower preliminary revenue for the third quarter of 2021 (ended September 30, 2021).
The company operates as an online insurance marketplace, which connects consumers with insurance providers. (See EverQuote stock charts on TipRanks)
The company expects to report third-quarter revenue in the range of $106.5 million to $107.5 million, down from $109 million to $111 million guided previously. The consensus estimate stands at $110.5 million.
Also, adjusted EBITDA is expected to be between $2 million and 2.5 million, as compared to the prior guidance of $4.5 million to $5.5 million. Net loss (GAAP basis) is expected to be in the range of $6 million to $5.5 million.
EverQuote said that the performance of auto insurance market in the third quarter was impacted as its key carrier customers experienced higher than expected claims losses.
Post this subdued outlook, the company announced plans to cut down non-marketing operating expenses by about 10%, principally from its auto marketplace operations.
The CFO of EverQuote, John Wagner, said, “As a result of moving quickly to streamline our operations, we believe we will be well positioned for future growth when the auto insurance carriers return to their normal pattern of acquiring consumers through digital channels. We expect this more efficient cost structure will better enable us to drive sustainable growth and profitability.”
Following the news, Needham analyst Mayank Tandon maintained a Buy rating on EverQuote but reduced the price target to $19 from $45. The price target implies 9.6% upside potential from current levels.
Tandon said, “While we expect the headwinds in the auto vertical to be temporary, we believe it will take some time for marketing budgets to recover as carriers adapt to the current underwriting environment.” (See Analysts’ Top Stocks on TipRanks)
Consensus among analysts is a Strong Buy based on 5 Buys and 1 Hold. The average EverQuote price target stands at $37.67, implying upside potential of 117.2%.
TipRanks data shows that financial blogger opinions are 100% Bullish on EVER, compared to a sector average of 71%.
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