EverQuote’s Improving Conditions & Clearer Sight On Growth/Margins Trigger 162% Price Target Boost By This Analyst

• Needham analyst Mayank Tandon maintained EverQuote Inc (NASDAQ: EVER) with a Buy and raised the price target from $8 to $21.

• Tandon hosted John Wagner (CFO) and Joseph Sanborn (EVP of Finance, Strategy, and Operations) at the 25th Annual Needham Growth Conference.

• Management’s comments were primarily focused on the most recent trends facing the auto insurance industry, as carriers continue to push policy rate increases in response to higher claims losses.

• Tandon noted that rate increases come at a lag to inflation due to regulatory hurdles and policy renewal cycles but believe approaching an inflection which should help carrier advertising budgets improve as FY23 unfolds.

• Tandon expects growth in the home, life, and health verticals (<20% of revenue today) to continue growing at a steady clip, which should help diversify the business in the future, making the business less susceptible to auto-specific claims losses.

• Given the analyst’s expectation for a recovery in the auto insurance vertical, Tandon boosted estimates to reflect a slightly faster recovery in the business.

• The analyst expects revenue growth to improve steadily through FY23 as more carriers get adjusted policy rates passed through, helping profitability improve and creating more opportunities to expand marketing budgets.

• Tandon expects conditions to improve as FY23 progresses, positioning EVER to exit FY23 at a normalized growth and margin cadence.

• Tandon believes there could be an upside to estimates if the recovery in auto advertising budgets occurs at a faster-than-expected clip.

• The analyst raised estimates in response to the improving conditions and a more precise line of sight toward more normalized growth and margins.

• Price Action: EVER shares traded higher by 5.24% at $17.68 on the last check Wednesday.

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