Nerdwallet Inc (NASDAQ:NRDS) Shares Surge

Nerdwallet Inc saw its shares soar over 31% in premarket trading on Wednesday after issuing optimistic guidance for Q4 amid strong revenue growth in Q3.

Q3 Earnings Report

For the third quarter, the personal finance company reported:
– Earnings per Share: $0 (missed consensus estimate of $0.04)
– Revenue: $191.3 million (up 25% year-over-year, exceeding the estimated $168.5 million)

Revenue Growth Drivers

The primary driver of revenue growth was insurance, which experienced a remarkable year-over-year increase of 916%. Additionally, revenue from small- and medium-sized business (SMB) products rose to $27.8 million, a 12% increase compared to last year, mainly due to growth in business credit cards and loan renewals.

Q4 Projections

For Q4 2024, NerdWallet expects revenue between $164 million and $172 million, surpassing the consensus estimate of $152 million. The company also projects a GAAP operating income between -$1 million and $3 million, with non-GAAP operating income expected to be between $8 million and $11 million. Adjusted EBITDA is anticipated to be in the range of $21.5 million to $24.5 million.

Analyst Insights

Following the report, KeyBanc Capital Markets reiterated an Overweight rating on NerdWallet stock and raised the target price from $18 to $20. Analysts remarked, “NerdWallet delivered a solid quarter with a 25% y/y revenue growth, achieving a new high with a 12% non-GAAP operating margin.” They emphasized confidence in a return to mid-teens normalized growth and ongoing margin improvement as macro conditions enhance.