EverQuote (EVER)

Online insurance comparison site EverQuote (NASDAQ:EVER) reported Q3 CY2025 results beating Wall Street’s revenue expectations, with sales up 20.3% year on year to $173.9 million. On top of that, next quarter’s revenue guidance ($177 million at the midpoint) was surprisingly good and 9.9% above what analysts were expecting. Its GAAP profit of $0.50 per share was 30.6% above analysts’ consensus estimates.

Company Overview

Aiming to simplify a once complicated process, EverQuote (NASDAQ:EVER) is an online insurance marketplace where consumers can compare and purchase various types of insurance from different providers

Marketplaces have existed for centuries. Where once it was a main street in a small town or a mall in the suburbs, sellers benefitted from proximity to one another because they could draw customers by offering convenience and selection. Today, a myriad of online marketplaces fulfill that same role, aggregating large customer bases, which attracts commission-paying sellers, generating flywheel scale effects that feed back into further customer acquisition.

Competitors offering an insurance marketplace include Progressive (NYSE:PGR) as well as private companies Farmer’s Insurance and Liberty Mutual.

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Thankfully, EverQuote’s 15.5% annualized revenue growth over the last three years was solid. Its growth beat the average consumer internet company and shows its offerings resonate with customers.

This quarter, EverQuote reported robust year-on-year revenue growth of 20.3%, and its $173.9 million of revenue topped Wall Street estimates by 4.3%. Company management is currently guiding for a 20% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 8.6% over the next 12 months, a deceleration versus the last three years. This projection doesn't excite us and indicates its products and services will face some demand challenges.

For online marketplaces like EverQuote, gross profit tells us how much money the company gets to keep after covering the base cost of its products and services, which typically include payment processing, hosting, and bandwidth fees in addition to the costs necessary to onboard buyers and sellers, such as identity verification.

EverQuote’s gross margin is one of the highest in the consumer internet sector, an output of its asset-lite business model and strong pricing power. It also enables the company to fund large investments in product and marketing during periods of rapid growth to achieve higher profits in the future. As you can see below, it averaged an elite 96.1% gross margin over the last two years. That means EverQuote only paid its providers $3.88 for every $100 in revenue.

EverQuote produced a 97.3% gross profit margin in Q3, up 1.1 percentage points year on year. EverQuote’s full-year margin has also been trending up over the past 12 months, increasing by 1.9 percentage points. If this move continues, it could suggest better unit economics due to more leverage from its growing sales on the fixed portion of its cost of goods sold (such as servers).

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 80.1% 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.

Investors regularly analyze operating income to understand a company’s profitability. Similarly, EBITDA is a common profitability metric for consumer internet companies because it excludes various one-time or non-cash expenses, offering a better perspective of the business’s profit potential.

EverQuote has been an efficient company over the last two years. It was one of the more profitable businesses in the consumer internet sector, boasting an average EBITDA margin of 12%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Analyzing the trend in its profitability, EverQuote’s EBITDA margin rose by 12.2 percentage points over the last few years, as its sales growth gave it operating leverage.

This quarter, EverQuote generated an EBITDA margin profit margin of 14.4%, up 1.4 percentage points year on year. The increase was encouraging, and because its EBITDA margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

We track the change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

In Q3, EverQuote reported EPS of $0.50, up from $0.31 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects EverQuote’s full-year EPS of $1.43 to grow 5.8%.

Although EBITDA is undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

EverQuote has shown impressive cash profitability, driven by its attractive business model that gives it the option to reinvest or return capital to investors. The company’s free cash flow margin averaged 11.9% over the last two years, better than the broader consumer internet sector.

Taking a step back, we can see that EverQuote’s margin expanded by 18.1 percentage points over the last few years. This is encouraging, and we can see it became a less capital-intensive business because its free cash flow profitability rose more than its operating profitability.

EverQuote’s free cash flow clocked in at $18.47 million in Q3, equivalent to a 10.6% margin. The company’s cash profitability regressed as it was 4.7 percentage points lower than in the same quarter last year, prompting us to pay closer attention. Short-term fluctuations typically aren’t a big deal because investment needs can be seasonal, but we’ll be watching to see if the trend extrapolates into future quarters.

One of the best ways to mitigate bankruptcy risk is to hold more cash than debt.

EverQuote is a profitable, well-capitalized company with $145.8 million of cash and no debt. This position is 18.5% of its market cap and gives it the freedom to borrow money, return capital to shareholders, or invest in growth initiatives. Leverage is not an issue here.

We were impressed by how significantly EverQuote blew past analysts’ EBITDA expectations this quarter. We were also glad its revenue guidance for next quarter trumped Wall Street’s estimates. Zooming out, we think this quarter featured some important positives. The stock traded up 4.9% to $23.51 immediately after reporting.

Updated: December 4, 2025 at 9:35 PM EST

Before making an investment decision, investors should account for EverQuote’s business fundamentals and valuation in addition to what happened in the latest quarter.

EverQuote has some positive attributes, but it isn’t one of our picks. First off, its revenue growth was solid over the last three years, and analysts believe it can continue growing at these levels. And while EverQuote’s sales and marketing spend is very high compared to other consumer internet businesses, its admirable gross margins are a wonderful starting point for the overall profitability of the business.

EverQuote’s EV/EBITDA ratio based on the next 12 months is 9.9x. While this valuation is fair, the upside isn’t great compared to the potential downside. We're fairly confident there are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $33.80 on the company (compared to the current share price of $27.77).