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EverCommerce (EVCM)
NASDAQ:EVCM
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EverCommerce
(NASDAQ:EVCM)
62Neutral
Positive Factors
Financial Performance
EverCommerce posted Q3 results that topped estimates on both the top and bottom line, despite incremental pressure on the firm’s Marketing business, in a quarter that is characterized as steady, continued progress against key transformation initiatives.
Stock Valuation
An eventual sale of the MarTech assets is expected to simplify EverCommerce's complex public market story and potentially lead to a higher stock valuation.
Negative Factors
Earnings Guidance
The MarTech segment has been associated with mixed or disappointing earnings guidance in several quarters, indicating challenges in this area.
EverCommerce (EVCM) vs. S&P 500 (SPY)
Market Cap
$1.67B
Dividend YieldN/A
Average Volume (3M)111.97K
Price to Earnings (P/E)―
Beta (1Y)1.39
Revenue Growth3.82%
EPS Growth-33.22%
CountryUS
Employees2,100
SectorTechnology
Sector Strength45
IndustrySoftware
Share Statistics
EPS (TTM)-0.28
Shares Outstanding183,484,000
10 Day Avg. Volume113,235
30 Day Avg. Volume111,967
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.40
Price to Cash Flow (P/CF)15.10
P/FCF Ratio18.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.00Price Target Upside63.40% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EverCommerce Business Overview & Revenue Model
Company DescriptionEverCommerce (EVCM) is a leading service commerce platform, providing vertically-tailored, integrated solutions designed to help service-based businesses accelerate growth, streamline operations, and improve customer experiences. The company operates across several sectors, including health services, home services, and fitness and wellness, offering a diverse portfolio of software solutions that cover everything from business management to customer engagement and marketing.
How the Company Makes MoneyEverCommerce makes money primarily through a subscription-based revenue model, where businesses pay recurring fees to access its suite of software solutions. These solutions include customer relationship management (CRM) systems, billing and payment processing, marketing and customer engagement tools, and business analytics. Additionally, the company generates revenue from transaction-based fees, particularly in payment processing, and from professional services such as consulting and implementation support. Partnerships with industry-specific service providers and integrations with third-party applications also contribute to its revenue streams by enhancing the value and functionality of its core offerings.
EverCommerce Financial Statement Overview
Summary
EverCommerce has demonstrated strong revenue growth and stable gross margins. However, persistent net losses and challenges in achieving net profitability impact the overall financial performance. The balance sheet is stable with moderate leverage, and cash flow is strong, but the focus needs to be on improving net income.Income Statement
EverCommerce has demonstrated a positive trend in revenue growth, increasing from $675.4 million to $693.2 million, reflecting a strong growth trajectory. Gross profit margins remain robust at approximately 59.3%, indicating efficient cost management. However, the company is still grappling with profitability challenges, evident from a negative net income margin of -7.5% for the TTM. Despite improvements in EBIT and EBITDA margins, the persistent net losses highlight ongoing challenges in achieving net profitability.68
Positive
Balance Sheet
The balance sheet shows a solid equity base with a debt-to-equity ratio of about 0.69, suggesting moderate leverage and financial stability. The equity ratio stands at 53.1%, indicating a healthy proportion of assets financed by equity. However, the return on equity is negative due to continued net losses, reflecting inefficiency in using shareholder funds to generate profit.72
Positive
Cash Flow
Cash flow analysis reveals a positive trajectory in free cash flow growth, increasing from $81.5 million to $93.3 million. The operating cash flow to net income ratio is strong, suggesting effective conversion of income into cash. However, the consistent negative net income affects the free cash flow to net income ratio, indicating ongoing challenges in translating revenue into profit.70
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 693.21M | 675.37M | 620.75M | 490.14M | 337.52M | 242.14M | Gross Profit |
| 411.21M | 444.36M | 403.37M | 327.91M | 222.50M | 169.04M | EBIT |
| 53.26M | 2.43M | -30.59M | -27.19M | -22.04M | -54.26M | EBITDA |
| 109.65M | 106.63M | 80.21M | 45.53M | 54.80M | -16.82M | Net Income Common Stockholders |
| -52.19M | -45.62M | -59.82M | -81.97M | -59.95M | -93.75M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 54.86M | 92.61M | 92.63M | 93.99M | 96.03M | 54.86M | Total Assets |
| 0.00 | 1.52B | 1.59B | 1.66B | 1.33B | 920.24M | Total Debt |
| 0.00 | 532.20M | 536.45M | 546.13M | 698.33M | 438.76M | Net Debt |
| 54.86M | 439.59M | 443.82M | 452.13M | 602.30M | 383.90M | Total Liabilities |
| 0.00 | 692.03M | 685.03M | 677.73M | 808.43M | 504.75M | Stockholders Equity |
| 415.49M | 826.04M | 906.69M | 985.65M | 519.16M | 415.49M |
| Cash Flow | Free Cash Flow | ||||
| 93.35M | 81.53M | 46.72M | 22.69M | 44.46M | -13.94M | Operating Cash Flow |
| 100.77M | 104.61M | 64.80M | 37.48M | 57.54M | -613.00K | Investing Cash Flow |
| -13.86M | -38.02M | -18.08M | -379.67M | -418.31M | -323.78M | Financing Cash Flow |
| -76.33M | -66.63M | -47.31M | 341.18M | 401.85M | 309.67M |
EverCommerce Technical Analysis
Negative
9.18
Price Trends
10.27
Negative
10.84
Negative
10.68
Negative
Market Momentum
-0.36
Positive
31.19
Neutral
13.16
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EVCM, the sentiment is Negative. The current price of 9.18 is below the 20-day moving average (MA) of 10.02, below the 50-day MA of 10.27, and below the 200-day MA of 10.68, indicating a bearish trend. The MACD of -0.36 indicates Positive momentum. The RSI at 31.19 is Neutral, neither overbought nor oversold. The STOCH value of 13.16 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EVCM.
EverCommerce Risk Analysis
EverCommerce disclosed 56 risk factors in its most recent earnings report. EverCommerce reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
EverCommerce Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $164.02B | 54.18 | 17.43% | 0.66% | 13.73% | 9.93% | |
79 Outperform | $37.61B | 53.52 | 13.63% | ― | 16.20% | 34.71% | |
75 Outperform | $188.60B | 35.35 | 36.31% | ― | 11.02% | 4.96% | |
70 Outperform | $173.45B | 62.06 | 19.58% | ― | 27.85% | 1400.97% | |
67 Neutral | $30.81B | 7,121.91 | 0.29% | ― | 21.07% | ― | |
62 Neutral | $1.67B | ― | -6.39% | ― | 3.82% | -33.22% | |
58 Neutral | $21.35B | 9.96 | -19.72% | 2.38% | 5.03% | -22.83% |
* Technology Sector Average
Performance Comparison
EVCM
EverCommerce
9.18
-0.33
-3.47%
ADBE
Adobe
438.60
-134.95
-23.53%
INTU
Intuit
591.14
-59.93
-9.20%
VEEV
Veeva Systems
233.46
-1.33
-0.57%
HUBS
HubSpot
611.06
-13.94
-2.23%
TSE:SHOP
Shopify
138.84
32.87
31.02%
EverCommerce Earnings Call Summary
Earnings Call Date: Nov 12, 2024 | % Change Since: -23.37% | Next Earnings Date: Mar 13, 2025
Earnings Call Sentiment Positive
The earnings call highlighted positive trends such as exceeding revenue and EBITDA expectations, strong pro forma growth, and significant progress in customer growth and payments revenue. However, challenges in the Marketing Technology Solutions revenue and a dip in net revenue retention due to past pricing actions were notable concerns.Highlights
Revenue and EBITDA Exceed Expectations
Third quarter revenue exceeded the top end of the guidance range, with GAAP revenue increasing 0.9% year-over-year. Adjusted EBITDA was $44.5 million, representing a 25.3% margin, and beat the top end of the guidance range with a year-over-year margin expansion of 140 basis points.
Pro Forma Revenue Growth
On a pro forma basis, revenue increased 4.3% year-over-year, and subscription and transaction revenue grew 8.6% year-over-year.
Payments Revenue Growth
Payments revenue, excluding the Fitness solutions, grew 6.7% year-over-year, driven by an 8.4% growth in Total Payment Volume (TPV).
Customer Growth and Utilization
Approximately 212,000 customers were enabled for more than one solution, reflecting 25% year-over-year growth. 88,000 customers were actively utilizing more than one solution, reflecting 13% year-over-year growth.
Free Cash Flow and Leverage
Levered free cash flow was $23 million in the quarter, with more than $80 million generated in the trailing 12 months. The company ended the quarter with $102 million in cash and a net leverage ratio of approximately 2.5x.
Lowlights
Marketing Technology Solutions Revenue Decline
Marketing Technology Solutions revenue was $34.4 million, down 6.7% from the prior year period, and is expected to end the fiscal year with year-over-year declines.
Net Revenue Retention Challenges
Annualized net revenue retention for core software and payment solutions was 96%, down from previous levels, due to the anniversary of a non-repetitive price increase in two high-velocity, lower ARPU solutions.
Company Guidance
During the EverCommerce Q3 2024 earnings call, the company provided guidance and highlighted several key metrics that illustrate its financial and operational performance. The reported revenue for the third quarter was $176.3 million, reflecting a 0.9% year-over-year increase, with subscription and transaction revenue at $137.6 million, up 3.7%, despite a 6.7% decline in marketing technology solutions revenue. On a pro forma basis, accounting for the sale of fitness solutions, revenue increased by 4.3% year-over-year. Adjusted EBITDA for the quarter was $44.5 million, surpassing the guidance range, with a 25.3% margin and a 140 basis point expansion year-over-year. Payments revenue, excluding fitness solutions, grew by 6.7%, driven by an 8.4% increase in total payment volume (TPV) to over $12.4 billion annually. The company ended the quarter with $679.2 million in LTM revenue, marking a 5.1% year-over-year growth on a pro forma basis, while subscription and transaction revenue grew by 8.6% on the same basis. EverCommerce's focus on transformation and optimization initiatives is expected to drive long-term growth and profitability, as evidenced by the hiring of a new leader for the EverPro vertical and efforts to enhance cross-sell and upsell opportunities. For Q4 2024, EverCommerce anticipates revenue between $168 million and $172 million and adjusted EBITDA ranging from $43 million to $46 million.EverCommerce Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
EverCommerce Restructures Leadership to Boost Growth
Positive
Jan 10, 2025
EverCommerce announced the appointment of Evan Berlin as the leader of its EverHealth healthcare vertical. Berlin, who has been with EverCommerce since its early days, previously served as Chief Operating Officer and was instrumental in the company’s growth and strategy. His new leadership role aligns with EverCommerce’s strategy to focus on high-growth verticals, and the company will not backfill his previous position. This move is part of a broader transformation initiative aimed at accelerating growth in EverHealth and other strategic areas.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.