EverQuote, Inc. (NASDAQ:EVER) Has Found A Path To Profitability

EverQuote, Inc. (NASDAQ:EVER) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. EverQuote, Inc. operates an online marketplace for insurance shopping in the United States. The US$899m market-cap company posted a loss in its most recent financial year of US$51m and a latest trailing-twelve-month loss of US$47m shrinking the gap between loss and breakeven. The most pressing concern for investors is EverQuote's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for EverQuote

EverQuote is bordering on breakeven, according to the 9 American Interactive Media and Services analysts. They expect the company to post a final loss in 2023, before turning a profit of US$1.3m in 2024. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 108% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving EverQuote's growth isn’t the focus of this broad overview, however, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that EverQuote has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on EverQuote, so if you are interested in understanding the company at a deeper level, take a look at EverQuote's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:

1. Valuation: What is EverQuote worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether EverQuote is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on EverQuote’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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.

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