NerdWallet rockets 31% as insurance growth drives strong Q3 revenue

Investing.com -- Nerdwallet Inc (NASDAQ:NRDS) saw its shares soar over 31% in premarket trading Wednesday after the company issued optimistic guidance for the fourth quarter amid strong revenue growth in Q3.

For the third quarter, the personal finance company reported earnings per share of $0, missing the consensus estimate of $0.04.

However, revenue came in at $191.3 million, up 25% year-over-year, and well above the estimated $168.5 million.

The primary driver of revenue growth in the quarter was insurance, which saw a remarkable year-over-year increase of 916%.

Revenue from small- and medium-sized business (SMB) products rose to $27.8 million, up 12% compared to last year, mainly due to growth in business credit cards and loan renewals.

For the fourth quarter of 2024, NerdWallet expects revenue between $164 million and $172 million, above the consensus estimate of $152 million.

The company projects a GAAP operating income between - $1 million and $3 million, with non-GAAP operating income expected in the range of $8 million to $11 million.

Adjusted EBITDA is anticipated to range between $21.5 million and $24.5 million.

Following the report, KeyBanc Capital Markets analysts reiterated an Overweight rating on NerdWallet stock and raised the target price from $18 to $20.

“NerdWallet delivered a solid quarter, with revenue returning to 25% y/y growth and 3Q non-GAAP operating margin reaching a new high of 12%,” they highlighted.

“We remain confident in normalized growth returning to the mid-teens, and expect to see ongoing margin improvement as macro conditions improve.”