Bonitas expects EverQuote to drop about 75% or more from current prices
Shares of EverQuote (EVER) are down in late morning (Wed. Dec 11, 2019) trading after Bonitas Research made a short call on the online insurance marketplace, saying it expects the stock to return to its pre-2019 price levels of about $5 per share.
Bonitas Research on Wednesday said it was shorting EverQuote and that it expects the stock to return to its pre-2019 price levels of about $5 per share, a decline of about 75% or more from current prices.
While EverQuote disclosed in its 2019 10-Q filing that it had over 11M+ average monthly consumer visits to its website, Bonitas said independent data from leading online analytics provider SimilarWeb showed that EverQuote’s website had just 4M visits in September, roughly 64% less than the reported 11M+ monthly consumer visits Everquote told investors. Additionally, Bonitas said SimilarWeb showed that traffic to EverQuote’s website was down 71% from January to September and was down 37% year-over-year in the third quarter, its lowest web traffic levels since November 2016. The firm said it believes SimilarWeb’s website analytics data is “credible.”
Bonitas said the significantly lower actual web traffic suggests that the company inflated its 2019 reported request growth to investors, and said it “would not be surprised” if time reveals that EverQuote either used a lower profit margin type of revenue and purchased more third party quote request from its verified partner network than claimed, resold each quote request more times than claimed or overstated web traffic and quote requests which suggests overstated unaudited revenues and profits.
The firm further stated that without additional information, “it is unclear to us where the truth ends and where the lies start” from EverQuote’s management about its growth in quote requests and revenues in 2019 while traffic to its website experienced a significant decline.
In late morning trading, shares of EverQuote are down nearly 5% to $34.27.
Originally Posted on December 11, 2019 – Everquote Down After Bonitas Says It Expects Stock to Drop to About $5
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