EverQuote, Inc.

EVER Details

EverQuote, Inc. (NASDAQ: EVER) is a US-based online marketplace that connectsseekers of insurance products to a network of insurance providers to obtain a relevant quotation for auto, home, and life insurance products. It derives its revenue from sales of consumer referrals to insurance carriers and agents and indirect distributors. The majority of the company's revenue comes from direct channels.

Q2FY21 Results: The company reported YoY growth of 34.18% in total revenue to USD 105.06 million in Q2FY21 (ended June 30, 2021) from USD 78.30 million in Q2FY20. The Automotive segment, which represented 82.20% of the total revenue in Q2FY21, expanded by 33.69% YoY, whereas the Other segment reported YoY growth of 36.45%. As a result, net loss for the company reduced to USD 1.88 million in Q2FY21 vs. USD 2.81 million in Q2FY20. As of June 30, 2021, the company had a cash balance of USD 54.52 million and no outstanding debt.

Profitability Profile (Source: Investor Presentation, August 2021)

Key Risks: In Q2FY21, EVER's top two customers accounted for 18% and 11% of the total revenue. As a result, the loss of any of these key customers could harm its financial performance. In addition, the majority of EVER's insurance agencies are associated with a limited number of insurance carriers. Hence, any cancellation or modification of these insurance carriers' contractual relationships could harm the company's business.

Outlook: As of Q2FY21, the company outlined that it expects to clock revenue in the range of USD 109 – 111 million, representing YoY growth of 22% at the mid-point. Adjusted EBITDA is estimated to range between USD 4.5 – 5.5 million. For FY21, EVER anticipates generating USD 440 – 446 million in revenues, representing a 28% YoY increase at the mid-level, together with adjusted EBITDA of USD 23 – 26 million.

Valuation Methodology: Price/Cash Flow Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

EVER Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: EVER's stock price declined 50.11% in the past six months and is currently leaning towards the lower band of its 52-week range of USD 16.95 to USD 54.96. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 35.84. We have valued the stock using the Price/Cash Flow-based relative valuation methodology and arrived at a target price of USD 22.51. Considering the significant correction in the stock price, the recent acquisition of PolicyFuel in August 2021, robust balance sheet, current valuation, and associated risks, we recommend a " Speculative Buy " rating on the stock at the current price of USD 17.59, up 2.42% as of October 13, 2021, 2:37 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

* Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

Document Security Systems, Inc.

DSS Details

DSS, Inc. (NYSE: DSS), formerly known as Document Security Systems, Inc., is a global company that specializes in blockchain security, direct marketing, medical services, consumer packaging, real estate, renewable energy, and securitized digital resources. DSS operates on a distribution sharing scheme under which investors will receive shares in its subsidiaries as they are spun off as separate public entities.  

Change of Name: On September 20, 2021, Document Security Systems, Inc. changed its name to DSS, Inc., effective from September 30, 2021. According to Frank D. Heuszel, CEO of DSS, document security solutions and services account for a relatively small fraction of the company business and omits the other high-growth business lines in which the company is operating.

Q2FY21 Results: The company reported YoY growth of 50.65% in total revenue to USD 4.19 million in Q2FY21 (ended June 30, 2021) compared to USD 2.78 million in Q2FY20. The Printed Products segment, representing 80.67% of the total revenue in Q2FY21, expanded by 48.59% YoY, whereas the Direct Marketing segment reported YoY growth of 59.88%. However, net loss for the company increased to USD 8.42 million in Q2FY21 vs. USD 0.79 million in Q2FY20. As of June 30, 2021, the company's balance sheet stood with cash and cash equivalents of USD 65.65 million and total debt of USD 8.15 million.

Key Risks: DSS' top two customers accounted for 45% and 75% of its total revenue and trade receivables, respectively, in H1FY21. As a result, the loss of any of these key customers could harm its financials.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

DSS Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: DSS' share price decreased 63.21% in the past six months and is currently leaning towards the lower-band of the 52-week range of USD 1.14 to USD 7.62. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 41.30. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 1.50. Considering the significant correction in the stock price, a surge in topline, current valuation, and associated risks, we recommend a "Speculative Buy" rating on the stock at the current price of USD 1.17, traded flat as of October 13, 2021, 11.37 AM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached. 

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