What Happened?
A number of stocks fell in the afternoon session after the U.S. announced potential tariffs on several European countries.
The sell-off was a reaction to news that the White House planned to impose a 10% tariff on imports from eight European nations, including France, Germany, and the United Kingdom, starting February 1. Reports indicated the tariffs were intended to pressure Denmark over the potential sale of Greenland to the U.S. and could rise to 25% if a deal was not reached.
The announcement caused a significant downturn in U.S. stocks, with the S&P 500 and Dow Jones falling more than 1.4% as investors returned from a holiday weekend and reacted to the heightened trade uncertainty. The downturn was further exacerbated by a spike in Treasury yields. Higher rates particularly hurt growth stocks such as tech names since investors must discount financials further out in the future back to the present.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Online Marketplace company Teladoc (NYSE: TDOC) fell 1.2%. Is now the time to buy Teladoc? Access our full analysis report here, it’s free.
- Online Marketplace company EverQuote (NASDAQ: EVER) fell 2.6%. Is now the time to buy EverQuote? Access our full analysis report here, it’s free.
Zooming In On EverQuote (EVER)
EverQuote’s shares are very volatile and have had 25 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 11 months ago when the stock gained 31.5% on the news that the company reported a standout Q4 2024 result, with revenue and EBITDA significantly crushing Wall Street's estimates.
Sales soared 165% compared to the previous year, fueled by a considerable rebound in the automotive insurance segment, which more than tripled. This sharp recovery highlights improving industry conditions and the company's ability to capitalize. On the profitability side, things looked even better. Adjusted EBITDA hit $18.9 million, flipping from a loss last year, thanks to strong margin expansion. Looking ahead, the company's first-quarter EBITDA guidance significantly exceeds analyst expectations, with a projected midpoint growth of 163% relative to the previous year. Zooming out, this was a solid quarter, marked by rapid growth, improved profitability, and strong guidance.
EverQuote is down 5% since the beginning of the year, and at $24.17 per share, it is trading 18.6% below its 52-week high of $29.71 from March 2025. Investors who bought $1,000 worth of EverQuote’s shares 5 years ago would now be looking at an investment worth $597.23.
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