Despite shrinking by US$68m in the past week, EverQuote (NASDAQ:EVER) shareholders are still up 247% over 3 years

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But in contrast you can make much more than 100% if the company does well. For example, the EverQuote, Inc. (NASDAQ:EVER) share price has soared 247% in the last three years. That sort of return is as solid as granite. On the other hand, the stock price has retraced 7.3% in the last week. But this could be related to the soft market, with stocks selling off around 0.6% in the last week.

Although EverQuote has shed US$68m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

EverQuote became profitable within the last three years. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

It is of course excellent to see how EverQuote has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling EverQuote stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

EverQuote shareholders are up 13% for the year. But that return falls short of the market. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 7% endured over half a decade. It could well be that the business is stabilizing. Before spending more time on EverQuote it might be wise to click here to see if insiders have been buying or selling shares.

Of course EverQuote may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.