EverQuote Inc - Class A (NASDAQ:EVER) Fits Louis Navellier’s High-Growth Stock Criteria

Louis Navellier’s The Little Book That Makes You Rich presents a structured method for finding high-growth stocks using eight key factors. The approach targets firms with strong earnings momentum, rising revenue growth, improving margins, and solid cash flow, traits that often lead to notable stock gains. By applying these filters, investors seek out businesses likely to beat the market.

EverQuote Inc - Class A (NASDAQ:EVER) stands out as a potential match for Navellier’s system, displaying many of the highlighted traits. Here’s how the company measures up against the eight rules:

1. Positive Earnings Revisions

Analysts have increased EPS projections for EVER’s next quarter by 23.4% in the last three months, a positive sign. Navellier views upward revisions as a key signal, since analysts usually adjust estimates cautiously unless fundamentals are improving.

2. Positive Earnings Surprises

EVER has exceeded earnings forecasts in three of the past four quarters, with an average beat of 118.7%. Steady outperformance indicates strong execution and could lead to further estimate hikes.

3. Increasing Sales Growth

Revenue growth is central to Navellier’s strategy. EVER’s year-over-year sales jumped 113.6%, while quarterly revenue rose 83.0%, showing rising demand. Fast top-line growth is vital for growth investors, as it often leads to better margins and scalable earnings.

4. Expanding Operating Margins

The firm’s operating margin improved by 189.3% over the last year, highlighting effective cost control alongside revenue gains. Navellier values margin growth as proof of pricing strength and operational efficiency.

5. Strong Cash Flow

Free cash flow climbed 524.3% year-over-year, a standout figure. High cash generation supports reinvestment, debt paydown, or shareholder returns, all key benefits for growing firms.

6. Earnings Growth

EVER’s EPS increased 179.1% year-over-year, with quarterly EPS up 320.0%. Navellier’s method favors rapid earnings growth, which often aligns with stock price strength.

7. Positive Earnings Momentum

The speed of EVER’s quarterly EPS growth (320.0% vs. 162.5% in the prior comparable quarter) points to rising profitability, a trait Navellier looks for in top picks.

8. High Return on Equity (ROE)

With an ROE of 25.6%, EVER effectively turns shareholder equity into profits. Navellier prefers ROE above 10%, as it suggests lasting competitive edges.

Fundamental Health and Valuation

ChartMill’s fundamental analysis report scores EVER a 6/10, noting solid financial health and profitability, though with uneven past earnings. Valuation seems fair, with a forward P/E of 16.0x, below the sector average, and a PEG ratio indicating growth is priced reasonably.

Conclusion

EverQuote’s fit with Navellier’s criteria, especially its fast revenue growth, margin gains, and earnings momentum, makes it an interesting option for growth-focused investors. While history doesn’t guarantee future results, the company’s fundamentals suggest it may deserve closer study.

For more stocks meeting the Little Book standards, check the pre-set screen here.

Disclaimer: This article is not investment advice. Do your own research or consult a financial advisor before making investment decisions.