NerdWallet (NASDAQ:NRDS) Releases Quarterly Earnings Results, Misses Estimates By $0.11 EPS

NerdWallet (NASDAQ:NRDS) posted its quarterly earnings results on Thursday. The company reported $0.23 EPS for the quarter, missing the consensus estimate of $0.34 by ($0.11), FiscalAI reports. NerdWallet had a net margin of 6.06% and a return on equity of 15.51%. The business had revenue of $239.60 million during the quarter, compared to analyst estimates of $251.86 million. During the same period last year, the firm posted $0.34 earnings per share. The company’s quarterly revenue was up 11.4% on a year-over-year basis.

Here are the key takeaways from NerdWallet’s conference call:

• Revenue missed guidance: Q3 revenue rose 11% year over year to $240 million but fell short of the $244 million–$260 million outlook, largely because auto insurance revenue declined $17 million year over year. Management said the narrow carrier network is limiting monetization and does not expect the issue to be resolved in Q4.
• Near-term earnings face pressure: The company forecast Q4 revenue of $191 million–$203 million and NGOI of $9 million–$15 million. It also expects to increase spending on longer-payback vertical integration and AI projects in 2027, which will weigh on NGOI in the near term.
• Search remains a headwind, though declines have stabilized somewhat: Organic search is much smaller than it was two years ago, with AI summaries especially affecting educational content. Management said marketplaces are more insulated and highlighted growth in paid marketing, though it is focused on keeping that channel profitable in-quarter.
• Cash generation and buybacks supported capital returns: Trailing-12-month adjusted free cash flow increased 51% year over year to $129 million, and NerdWallet repurchased about $151 million of stock over that period. The company had approximately $57 million remaining under its repurchase authorization at quarter-end.

NerdWallet Stock Down 31.0%

NRDS traded down $3.54 during trading on Friday, reaching $7.89. The stock had a trading volume of 3,076,822 shares, compared to its average volume of 783,210. The stock has a 50 day moving average of $9.70 and a two-hundred day moving average of $9.80. The firm has a market capitalization of $504.33 million, a price-to-earnings ratio of 10.12 and a beta of 1.20. NerdWallet has a 1-year low of $7.33 and a 1-year high of $16.24.

Key Stories Impacting NerdWallet

Here are the key news stories impacting NerdWallet this week:

• Positive Sentiment: Truist maintained a Buy rating and sees potential upside from its current level, although it cut its price target to $12 from $15. Truist analyst information
• Negative Sentiment: Fourth-quarter revenue guidance of $191 million–$203 million came in well below the roughly $241 million analyst consensus, signaling a weaker near-term outlook. NerdWallet third-quarter results
• Negative Sentiment: Third-quarter adjusted earnings of $0.23 per share and revenue of $239.6 million missed consensus estimates of $0.34 and $251.9 million, respectively. Earnings also declined from $0.34 per share a year earlier. NerdWallet misses third-quarter estimates
• Negative Sentiment: Costs rose about 22%, nearly twice the 12% growth in consumer revenue, fueling concerns that expense growth is eroding the benefit of sales gains. Why NerdWallet stock came under pressure
• Negative Sentiment: William Blair downgraded NerdWallet from Outperform to Market Perform, adding to the cautious analyst commentary. William Blair downgrade

Wall Street Analysts Forecast Growth

Several equities research analysts recently weighed in on the stock. Weiss Ratings upgraded shares of NerdWallet from a “hold (c-)” rating to a “hold (c)” rating in a research note on Thursday, October 15th. Truist Financial lowered their price objective on NerdWallet from $15.00 to $12.00 and set a “buy” rating for the company in a research note on Friday. Finally, William Blair cut NerdWallet from an “outperform” rating to a “market perform” rating in a research note on Friday. Three analysts have rated the stock with a Buy rating, four have issued a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of “Hold” and an average target price of $11.40.

About NerdWallet

NerdWallet, Inc is a personal finance company that operates a digital platform designed to help consumers make informed financial decisions. Its website and mobile tools provide educational content, personalized recommendations and comparison services across a range of financial products.

The company covers categories including credit cards, banking, personal and student loans, mortgages, insurance, investing and small-business finance. NerdWallet generates revenue primarily through partnerships with financial institutions and other providers when users engage with or apply for recommended products.

Founded in 2009 by Tim Chen and Jacob Gibson, NerdWallet is headquartered in San Francisco and serves consumers primarily in the United States.