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Porch Group, Inc. (PRCH)
:PRCH
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Porch Group
(NASDAQ:PRCH)
52Neutral
Positive Factors
Financial Performance
Porch's first positive EBITDA year in history was achieved before switching to a reciprocal model and including higher margin cash flow streams.
Growth Strategy
PRCH is returning to growth mode and is confident it can execute on its strategy.
Negative Factors
Stock Price Volatility
Shares have retraced below $4 after briefly breaking $6, presumably reflecting headwinds in the housing market and the recent stock sell-off.
Valuation Complexity
PRCH's unique structure, business mix, and high leverage make valuation complex.
Porch Group (PRCH) vs. S&P 500 (SPY)
Market Cap
$645.71M
Dividend YieldN/A
Average Volume (3M)2.37M
Price to Earnings (P/E)―
Beta (1Y)2.89
Revenue Growth1.75%
EPS Growth72.30%
CountryUS
Employees729
SectorTechnology
Sector Strength67
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.08
Shares Outstanding101,846,980
10 Day Avg. Volume1,862,845
30 Day Avg. Volume2,368,954
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.20
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit3.65
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$9.33Price Target Upside47.16% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Porch Group Business Overview & Revenue Model
Company DescriptionPorch Group, Inc. (PRCH) operates as a vertical software company that provides software and services to home services industries. The company offers a comprehensive platform for home service companies, such as home inspectors, moving companies, utility companies, and other service providers, to manage their businesses and connect with homeowners. Porch Group's core products and services include software solutions for business operations, customer relationship management, and ancillary services like insurance and warranty offerings.
How the Company Makes MoneyPorch Group primarily generates revenue through a combination of software subscription fees, transaction-based fees, and ancillary services. The company charges home service businesses for access to its software platform, which includes tools for managing appointments, customer interactions, and business operations. Additionally, Porch Group earns transaction fees by facilitating connections between homeowners and service providers. The company also has significant revenue streams from partnerships with insurance carriers, where it receives commissions for policies sold through its platform. Furthermore, Porch Group offers warranty products and other home-related services, contributing to its diversified revenue model.
Porch Group Financial Statement Overview
Summary
Porch Group demonstrates strong revenue growth but struggles with profitability and financial stability. The persistent negative earnings, high leverage, and volatile cash flows are significant concerns, despite positive revenue trends.Income Statement
Porch Group has shown consistent revenue growth, with a significant increase from $73.2M in 2020 to $437.8M in 2024, indicating strong top-line expansion. However, the company remains unprofitable with persistent negative EBIT and net income margins. The net profit margin improved slightly in 2024 compared to 2023, but remains negative, reflecting ongoing challenges in achieving profitability.45
Neutral
Balance Sheet
The company exhibits financial instability with negative stockholders' equity in recent years, indicating significant liabilities exceeding assets. The debt-to-equity ratio is concerning due to negative equity, suggesting high leverage and financial risk. Despite having substantial cash reserves, the overall balance sheet reflects financial stress.30
Negative
Cash Flow
Porch Group's cash flow generation is volatile, with negative operating and free cash flows in 2024, highlighting cash management challenges. Although there was a positive free cash flow in 2023, the inconsistency in cash flow performance and reliance on external financing present potential liquidity risks.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 437.85M | 430.30M | 275.95M | 192.43M | 73.22M | Gross Profit |
| 212.22M | 210.06M | 168.37M | 137.15M | 55.65M | EBIT |
| -64.57M | -138.43M | -115.66M | -85.84M | -42.80M | EBITDA |
| 37.35M | -77.07M | -116.95M | -94.42M | -34.34M | Net Income Common Stockholders |
| -32.83M | -133.93M | -156.56M | -109.08M | -51.61M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 191.74M | 294.01M | 251.58M | 324.99M | 196.05M | Total Assets |
| 813.97M | 899.39M | 1.05B | 1.03B | 268.59M | Total Debt |
| 403.94M | 435.74M | 444.30M | 417.43M | 47.98M | Net Debt |
| 236.29M | 177.32M | 229.24M | 101.69M | -148.06M | Total Liabilities |
| 857.19M | 935.08M | 969.70M | 820.00M | 129.18M | Stockholders Equity |
| -43.23M | -35.68M | 79.35M | 214.57M | 139.41M |
| Cash Flow | Free Cash Flow | |||
| -32.20M | 23.83M | -28.94M | -39.47M | -51.55M | Operating Cash Flow |
| -31.68M | 33.93M | -18.49M | -34.78M | -48.67M | Investing Cash Flow |
| -45.06M | -56.25M | -79.68M | -263.43M | -10.67M | Financing Cash Flow |
| -23.71M | 90.95M | 1.98M | 415.55M | 259.61M |
Porch Group Technical Analysis
Positive
6.34
Price Trends
6.15
Positive
5.48
Positive
3.75
Positive
Market Momentum
0.06
Negative
55.87
Neutral
91.45
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRCH, the sentiment is Positive. The current price of 6.34 is above the 20-day moving average (MA) of 5.60, above the 50-day MA of 6.15, and above the 200-day MA of 3.75, indicating a bullish trend. The MACD of 0.06 indicates Negative momentum. The RSI at 55.87 is Neutral, neither overbought nor oversold. The STOCH value of 91.45 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PRCH.
Porch Group Risk Analysis
Porch Group disclosed 69 risk factors in its most recent earnings report. Porch Group 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
Porch Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $914.43M | 435.29 | 3.87% | ― | 29.74% | ― | |
60 Neutral | $10.78B | 10.47 | -6.71% | 2.99% | 7.58% | -12.08% | |
59 Neutral | $481.05M | ― | -44.89% | ― | 1.88% | -11430.00% | |
52 Neutral | $645.71M | ― | 75.95% | ― | 1.75% | 72.30% | |
52 Neutral | $151.29M | ― | -27.24% | ― | 13.62% | 30.26% | |
50 Neutral | $173.28M | ― | -10.65% | ― | -26.16% | 2.89% | |
48 Neutral | $200.62M | ― | -24.82% | ― | -9.55% | 12.28% |
* Technology Sector Average
Performance Comparison
PRCH
Porch Group
6.34
3.15
98.75%
FRGE
Forge Global Holdings
12.08
-14.77
-55.01%
ONTF
ON24
4.68
-1.78
-27.55%
SMRT
SmartRent
0.90
-1.41
-61.04%
DSP
Viant Technology
14.91
6.18
70.79%
BMBL
Bumble
4.39
-5.88
-57.25%
Porch Group Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 0.00%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Positive
The earnings call reflected a very strong performance for Porch Group in Q1 2025, marked by record-breaking adjusted EBITDA, increased revenue, and significant positive cash flow. The company managed to raise its 2025 guidance and demonstrated resilience against market challenges, including successful reinsurance renewals and a robust balance sheet. However, some challenges were noted in the Consumer Services segment and flat growth in the Software and Data segment. Overall, the positive aspects and strategic positioning far outweigh the lowlights.Q1-2025 Updates
Positive Updates
Record-Breaking Adjusted EBITDA
Porch Group achieved its highest ever Q1 adjusted EBITDA of $17 million, representing a 20% margin and a $34 million increase over the prior year.
Increased Revenue and Strong Margins
The company reported Q1 revenue of $85 million and realized 82% gross margins, resulting in a gross profit of $69 million, an 86% increase compared to Q1 2024.
Positive Cash Flow
Porch Group generated $27 million of positive cash flow from operations for the quarter, significantly surpassing expectations.
Raised 2025 Guidance
The company increased its 2025 revenue guidance to $400 million-$420 million and adjusted EBITDA guidance to $60 million-$70 million.
Successful Reinsurance Renewals
Porch completed reinsurance renewals, reducing exposure to catastrophic weather claims and lowering reinsurance costs.
Strong Balance Sheet
Porch Group's cash plus investments were $114 million at the end of Q1 2025, and the Reciprocal's surplus combined with non-admitted assets reached $198 million.
Growth in Reciprocal Written Premium
Reciprocal written premium increased by approximately 10% year-over-year, reaching $97 million.
Negative Updates
Challenges in Consumer Services
Revenue for Consumer Services was $14.7 million, a 9% decrease over the prior year, driven by the closure of lower-margin moving products.
Flat Software and Data Revenue
Software and Data segment revenue was $22 million, only a 4% increase over the prior year, with growth slowed by nonrecurring revenue transactions.
Company Guidance
During Porch Group's Q1 2025 earnings call, the company reported robust financial performance, leading to an increase in their 2025 guidance. Revenue for the quarter was $85 million, exceeding expectations, driven by $97 million in written premium at the carrier. Gross profit rose to $69 million, marking an 86% increase year-over-year, with a gross margin of 82%. Adjusted EBITDA reached $17 million, representing a 20% margin and a $34 million improvement from the previous year. Porch also generated $27 million in positive cash flow from operations. The company anticipates continued strong performance, increasing their 2025 revenue guidance to $400-$420 million and adjusted EBITDA guidance to $60-$70 million. Porch's strategic shift to a commission and fee-based model and its focus on high-margin insurance services are expected to sustain growth and profitability.Porch Group Corporate Events
Business Operations and StrategyFinancial Disclosures
Porch Group Exceeds Q1 2025 Expectations, Raises Guidance
Positive
May 6, 2025
On May 6, 2025, Porch Group reported its first quarter 2025 results, exceeding expectations and raising its guidance for the year. The company achieved a revenue of $84.5 million and a net income of $8.4 million, with an Adjusted EBITDA of $16.9 million, marking a significant increase compared to the previous year. The formation of the Porch Reciprocal Exchange and the sale of its legacy insurance carrier, Homeowners of America, to the Reciprocal have simplified Porch’s business model, making it more predictable and higher margin. The Reciprocal remains healthy, having successfully placed a new reinsurance program at a lower cost, allowing Porch to benefit from the growth of the homeowners insurance industry while reducing risk.
Spark’s Take on PRCH Stock
According to Spark, TipRanks’ AI Analyst, PRCH is a Neutral.
Porch Group’s strong revenue growth and positive earnings call outlook are overshadowed by its ongoing financial instability and negative valuation metrics. The stock’s technical indicators suggest some caution, while corporate events highlight strategic initiatives. Overall, the stock presents a high-risk profile with potential for improvement.
To see Spark’s full report on PRCH stock, click here.
Executive/Board ChangesBusiness Operations and Strategy
Porch Group Approves 2025 Incentive Program for Executives
Positive
Apr 8, 2025
On April 4, 2025, Porch Group‘s Board of Directors approved a 2025 long-term incentive program for its executive officers, allocating 75% of the grant value in performance-based restricted stock units (PRSUs) and 25% in restricted stock units (RSUs). The program aims to align executive compensation with company performance, focusing on metrics such as relative total shareholder return, adjusted EBITDA, and revenue, with vesting conditions extending to 2028. This initiative is designed to motivate exceptional financial and stock performance, aligning with stockholder value creation.
Spark’s Take on PRCH Stock
According to Spark, TipRanks’ AI Analyst, PRCH is a Neutral.
Porch Group’s overall stock score reflects its strong revenue growth and strategic initiatives towards profitability. However, persistent financial instability and valuation concerns weigh down the score. The optimistic future guidance and strategic transitions highlighted in the earnings call provide a balanced view, with potential for improvement as the company aligns its operations towards profitability.
To see Spark’s full report on PRCH stock, click here.
Business Operations and StrategyFinancial Disclosures
Porch Group Reports Strong Q4 2024 Financial Results
Positive
Feb 25, 2025
Porch Group reported its financial results for the fourth quarter of 2024, showing a net income of $30.5 million and an adjusted EBITDA of $41.8 million, marking significant improvements from the previous year. The company achieved a pivotal shift towards sustainable profitable growth, with operational highlights including the formation of the Porch Insurance Reciprocal Exchange and a strong increase in new business premiums, indicating a positive outlook for 2025.
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.