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NerdWallet, Inc. Class A (NRDS)
NASDAQ:NRDS
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NerdWallet, Inc. Class A
(NASDAQ:NRDS)
55Neutral
Positive Factors
Earnings and Market Performance
Shares were up 8% due to a significant earnings beat and a strong outlook, which may shift investor focus away from organic search traffic declines.
Revenue Growth
Insurance revenue is growing significantly and now comprises a large portion of total revenue, positioning it as the primary driver of year-over-year revenue growth.
Negative Factors
Organic Traffic
The trend of organic traffic deterioration hasn't shown signs of improvement, raising concerns about medium-term traffic trends.
Revenue Dependence
There is concern about the company's reliance on the insurance segment, which could put revenue estimates at risk if other segments do not improve.
Traffic Trends and Profitability
NerdWallet continues to struggle to attract organic search traffic, leading to a shift towards lower-margin paid traffic.
NerdWallet, Inc. Class A (NRDS) vs. S&P 500 (SPY)
Market Cap
$691.43M
Dividend YieldN/A
Average Volume (3M)811.78K
Price to Earnings (P/E)23.0
Beta (1Y)1.63
Revenue Growth14.71%
EPS GrowthN/A
CountryUS
Employees650
SectorCommunication Services
Sector Strength78
IndustryInteractive Multi-Media
Share Statistics
EPS (TTM)0.40
Shares Outstanding42,422,180
10 Day Avg. Volume502,722
30 Day Avg. Volume811,776
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.98
Price to Cash Flow (P/CF)17.10
P/FCF Ratio17.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$17.00Price Target Upside82.21% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
NerdWallet, Inc. Class A Business Overview & Revenue Model
Company DescriptionNerdWallet, Inc. Class A (NRDS) is a personal finance company that provides consumers with information, tools, and resources to make informed financial decisions. Operating in the financial technology sector, NerdWallet offers a wide range of services including advice on credit cards, mortgages, insurance, personal loans, and investing. The company aims to simplify financial decisions by providing personalized recommendations and insights through its website and mobile applications.
How the Company Makes MoneyNerdWallet makes money primarily through affiliate marketing partnerships with financial service providers. When users access NerdWallet's platform to find financial products such as credit cards, loans, or insurance, and subsequently apply for these products through the links provided, NerdWallet earns a referral fee or commission from the financial institutions. Additionally, NerdWallet generates revenue through advertising and partnerships with financial services companies that pay for premium placement or sponsored content on its platform. This model allows NerdWallet to offer its core services to consumers for free while monetizing its large user base and high web traffic through these partnerships.
NerdWallet, Inc. Class A Financial Statement Overview
Summary
NerdWallet, Inc. is on a positive trajectory with strong revenue growth and improving profitability. The balance sheet is robust with substantial equity and no debt, minimizing financial risks. Cash flow generation is solid, supporting operational and strategic flexibility. Continued focus on margin expansion and strategic use of leverage could enhance growth prospects further.Income Statement
NerdWallet, Inc. has demonstrated impressive revenue growth over the years, with a notable increase of 14.71% from 2023 to 2024. The gross profit margin is robust at 90.74% for 2024, indicating efficient cost management. However, the net profit margin has only recently turned positive at 4.42%, reflecting improved profitability but suggesting room for further margin expansion. The EBIT margin remains modest at 1.37%, indicating operational efficiency improvements are still underway.85
Very Positive
Balance Sheet
The balance sheet is solid with a strong equity base, evidenced by an equity ratio of 83.25%. The company operates with no debt, which eliminates financial leverage risks. Return on Equity (ROE) has improved to 8.34% in 2024, showcasing enhanced profitability. Nevertheless, the low debt-to-equity ratio of 0.00 suggests limited leverage, which could be a strategic area for growth financing.75
Positive
Cash Flow
Cash flows have improved significantly, with free cash flow growing by 67.14% from 2023 to 2024. The operating cash flow to net income ratio of 2.36 indicates strong cash generation relative to net income. The company maintains a healthy cash position with a free cash flow to net income ratio of 2.34, reflecting efficient cash utilization. However, the substantial negative financing cash flow in 2024 may indicate a strategic shift or repayment of obligations.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 687.60M | 599.40M | 538.90M | 379.60M | 245.30M |
| Gross Profit | ||||
| 624.10M | 545.40M | 499.10M | 351.10M | 224.00M |
| EBIT | ||||
| 9.40M | 3.60M | -17.50M | -39.00M | 1.20M |
| EBITDA | ||||
| 54.10M | 55.30M | 19.50M | -9.30M | 16.30M |
| Net Income Common Stockholders | ||||
| 30.40M | -11.80M | -10.20M | -42.50M | 5.30M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 66.30M | 102.50M | 83.90M | 167.80M | 85.40M |
| Total Assets | ||||
| 437.60M | 418.60M | 425.70M | 364.10M | 255.20M |
| Total Debt | ||||
| 8.90M | 9.60M | 12.70M | 15.10M | 45.10M |
| Net Debt | ||||
| -66.30M | -90.80M | -71.20M | -152.70M | -38.30M |
| Total Liabilities | ||||
| 73.40M | 51.70M | 84.00M | 106.50M | 172.50M |
| Stockholders Equity | ||||
| 364.20M | 366.90M | 341.70M | 257.60M | 82.70M |
| Cash Flow | Free Cash Flow | |||
| 71.20M | 42.60M | -7.20M | -15.80M | -3.30M |
| Operating Cash Flow | ||||
| 71.80M | 72.10M | 25.00M | 7.20M | 15.40M |
| Investing Cash Flow | ||||
| -29.70M | -29.50M | -100.30M | -23.00M | -55.40M |
| Financing Cash Flow | ||||
| -76.50M | -26.20M | -8.40M | 100.20M | 55.70M |
NerdWallet, Inc. Class A Technical Analysis
Negative
9.33
Price Trends
11.78
Negative
12.89
Negative
12.97
Negative
Market Momentum
-0.66
Negative
36.34
Neutral
70.50
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NRDS, the sentiment is Negative. The current price of 9.33 is above the 20-day moving average (MA) of 9.31, below the 50-day MA of 11.78, and below the 200-day MA of 12.97, indicating a neutral trend. The MACD of -0.66 indicates Negative momentum. The RSI at 36.34 is Neutral, neither overbought nor oversold. The STOCH value of 70.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NRDS.
NerdWallet, Inc. Class A Risk Analysis
NerdWallet, Inc. Class A disclosed 56 risk factors in its most recent earnings report. NerdWallet, Inc. Class A 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
NerdWallet, Inc. Class A Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $70.10B | 17.50 | 20.00% | ― | 7.10% | 4.45% | |
73 Outperform | $37.99B | 12.98 | 14.50% | ― | 10.06% | 38060.98% | |
70 Outperform | $12.88B | 35.57 | 25.11% | 0.56% | 11.60% | 161.17% | |
60 Neutral | $730.89M | ― | -35.80% | ― | 33.86% | 66.85% | |
59 Neutral | $29.14B | 0.91 | -18.74% | 4.05% | 2.07% | -49.65% | |
55 Neutral | $691.43M | 23.05 | 8.32% | ― | 14.71% | ― | |
54 Neutral | $207.80M | ― | 1.10% | ― | 17.56% | 48.73% |
* Communication Services Sector Average
Performance Comparison
NRDS
NerdWallet, Inc. Class A
9.32
-5.38
-36.60%
EHTH
Ehealth
6.94
0.91
15.09%
MORN
Morningstar
302.01
-4.72
-1.54%
TREE
Lendingtree
52.86
10.52
24.85%
PYPL
PayPal Holdings
68.86
1.87
2.79%
XYZ
Block
56.99
-27.59
-32.62%
NerdWallet, Inc. Class A Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -33.26% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Neutral
The earnings call showed strong revenue growth driven by the Insurance segment and strategic initiatives, but also highlighted challenges with declining MUUs, struggles in personal loans, and ongoing lending environment difficulties. Despite these challenges, the company is optimistic about future growth with new campaigns and strategic focus on Vertical Integration.Highlights
Strong Revenue Growth
NerdWallet reported a 37% year-over-year increase in Q4 revenue to $184 million and a 15% increase in full-year revenue to $688 million.
Insurance Segment Expansion
The Insurance segment grew by 821% year-over-year in Q4 and contributed $72 million in revenue, becoming the largest segment.
Banking Products Growth
Banking products grew 5% year-over-year, despite declining savings accounts rates.
New Initiatives and Brand Activation
NerdWallet launched a new national campaign at the Super Bowl, debuted NerdWallet Mortgage Experts, and introduced the NerdWallet+ subscription membership.
Vertical Integration and Registrations
Focused on enhancing Vertical Integration and driving user engagement, which includes successful integration of Next Door Lending.
Lowlights
Decline in Monthly Unique Users (MUUs)
MUUs decreased by 20% year-over-year in Q4, with anticipated further decline in Q1.
Personal Loans Segment Struggles
Personal loans business ended the year down 51% year-over-year, focusing efforts on Insurance instead.
Lending Environment Challenges
Faced headwinds across consumer and SMB lending due to rising 10-year rates, affecting growth expectations.
Credit Cards Revenue Decline
Q4 revenue from Credit Cards declined 19% year-over-year, with continued downward pressure expected.
SMB Products Revenue Decline
SMB products delivered Q4 revenue of $26 million, declining 7% year-over-year.
Company Guidance
During the NerdWallet Q4 2024 earnings call, several key metrics and guidance were provided. The company reported a 37% year-over-year revenue increase to $184 million and a non-GAAP operating income of $17 million. Insurance revenue skyrocketed by 821% year-over-year, reaching $72 million, while banking products experienced a modest 5% growth. In contrast, personal loans saw a significant decline of 51% year-over-year. Looking ahead, NerdWallet projects Q1 2025 revenue between $187 million and $193 million, a 17% year-over-year growth, with a non-GAAP operating income expected to range from a $3 million loss to breakeven. For the full year 2025, non-GAAP operating income is anticipated to be between $50 million and $60 million, with an emphasis on increasing the quality of consumer relationships rather than expanding the Monthly Unique Users (MUUs) metric, which saw a 20% decline to 19 million in Q4 2024.NerdWallet, Inc. Class A Corporate Events
Business Operations and StrategyFinancial Disclosures
NerdWallet Unveils 2025 Investor Presentation Highlights
Neutral
Mar 3, 2025
On March 3, 2025, NerdWallet, Inc. released its 2025 Investor Presentation, which includes the company’s full-year 2026 non-GAAP operating income guidance and strategic initiatives. The presentation focuses on strengthening the NerdWallet brand and expanding its services in the SMB and mortgage sectors, aiming to provide more hands-on guidance to consumers.
Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
NerdWallet Appoints New CFO Amid Revenue Surge
Positive
Feb 19, 2025
On February 19, 2025, NerdWallet announced the appointment of John H. Lee as Chief Financial Officer, effective March 17, 2025. Lee, previously with Divvy Homes, is expected to lead strategic initiatives and support the company’s growth goals. The company also reported a significant increase in revenue for the fourth quarter of 2024, driven by strong demand in insurance and banking, despite challenges in the lending sector. With revenue of $183.8 million, up 37% year-over-year, the company exceeded expectations, highlighting strategic investments in vertical integration and engagement strategies.
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.