Over the past six months, EverQuote’s shares (currently trading at $23.80) have posted a disappointing 15.2% loss, well below the S&P 500’s 16.5% gain. This might have investors contemplating their next move.
Is now the time to buy EverQuote, or should you be careful about including it in your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Is EverQuote Not Exciting?
Even with the cheaper entry price, we're swiping left on EverQuote for now. Here is one reason why EVER doesn't excite us and a stock we'd rather own.
Poor Marketing Efficiency Drains Profits
Consumer internet businesses like EverQuote grow from a combination of product virality, paid advertisement, and incentives (unlike enterprise software products, which are often sold by dedicated sales teams).
It’s very expensive for EverQuote to acquire new users as the company has spent 80.2% of its gross profit on sales and marketing expenses over the last year. This inefficiency indicates a highly competitive environment with little differentiation between EverQuote and its peers.
Final Judgment
EverQuote isn’t a terrible business, but it isn’t one of our picks. After the recent drawdown, the stock trades at 10.5× forward EV/EBITDA (or $23.80 per share). This valuation multiple is fair, but we don’t have much faith in the company. We're pretty confident there are superior stocks to buy right now. We’d recommend looking at one of our top digital advertising picks.
Stocks We Like More Than EverQuote
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