Why EverQuote Tumbled Yesterday

Shares of EverQuote (NASDAQ: EVER) closed down more than 12% yesterday after the online-insurance marketplace reported third-quarter results that missed Wall Street expectations and narrowed its outlook for the full year. Analysts responded by either lowering their price targets on its stock or reducing their ratings from buy to hold.

Although EverQuote reported a 20% increase in revenue to $107.6 million, it was below projections of $109.9 million as challenges in the auto-insurance underwriting market continued to vex the insurance platform.

Although management believes the situation will correct itself over time as carriers adjust their pricing strategies to take into account the new underwriting environment, EverQuote was forced to better align its cost structure with what it's seeing in the marketplace. As a result, it implemented an approximate 10% structural reduction in non-marketing operating expenses.

Source Fool.com