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Porch Group (PRCH)
NASDAQ:PRCH
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Porch Group
(NASDAQ:PRCH)
54Neutral
Positive Factors
Business Transformation
The business transformation at Porch Group is highlighted by a guidance raise, indicating a powerful positive shift.
Earnings Guidance
PRCH raised 2025 guidance and reiterated its 2026/long-term targets.
EBITDA Performance
Porch's first positive EBITDA year in history was achieved before switching to a reciprocal model and including higher margin cash flow streams.
Negative Factors
Housing Market
Shares have retraced below $4 after briefly breaking $6, presumably reflecting headwinds in the housing market and the recent stock sell-off.
Stock Performance
Shares are still trading below Investor Day levels despite the improved outlook, suggesting market skepticism.
Weather Risks
The largest risk is the looming hurricane season, with reports of record high water temperatures suggesting a greater likelihood of hurricanes and tropical storms.
Porch Group (PRCH) vs. S&P 500 (SPY)
Market Cap
$748.89M
Dividend YieldN/A
Average Volume (3M)3.36M
Price to Earnings (P/E)―
Beta (1Y)3.36
Revenue Growth1.75%
EPS Growth72.30%
CountryUS
Employees729
SectorTechnology
Sector Strength46
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.41
Shares Outstanding101,751,770
10 Day Avg. Volume2,830,453
30 Day Avg. Volume3,356,385
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.86
Price to Cash Flow (P/CF)-7.70
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$8.00Price Target Upside8.70% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Porch Group Business Overview & Revenue Model
Company DescriptionPorch Group, Inc. operates a software platform in the United States and Canada. The company operates through two segments, Vertical Software and Insurance. The Vertical Software segment provides software and services to home services companies and gives early access to homebuyers and homeowners. It offers services to home services companies, such as home inspectors, consumers, such as homebuyers and homeowners, service providers, such as moving, insurance, warranty, and security companies, and TV/Internet providers. This segment operates through Floify, HireAHelper, ISN, iRoofing, Palm-Tech, Porch.com, Rynoh, and V12 brands. The Insurance segment offers property related insurance policies through our own risk-bearing carrier and independent agency as well as risk-bearing home warranty company. This segment operates though American Home Protect, Elite Insurance Group, and Homeowners of America brands. In addition, the company provides property and casualty, home, auto, flood, and umbrella insurance products; and contractor services. The company was incorporated in 2011 and is headquartered in Seattle, Washington.
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
7.36
Price Trends
5.43
Positive
4.82
Positive
3.19
Positive
Market Momentum
0.53
Negative
62.18
Neutral
73.93
Neutral
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 7.36 is above the 20-day moving average (MA) of 6.58, above the 50-day MA of 5.43, and above the 200-day MA of 3.19, indicating a bullish trend. The MACD of 0.53 indicates Negative momentum. The RSI at 62.18 is Neutral, neither overbought nor oversold. The STOCH value of 73.93 is Neutral, 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 (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $8.20B | 40.56 | 49.98% | ― | 28.01% | 8699.84% | |
67 Neutral | $976.64M | 48.70 | 5.72% | 0.35% | 4.51% | 32.28% | |
63 Neutral | $900.24M | 53.20 | 5.08% | ― | 8.33% | 436.49% | |
58 Neutral | $1.31B | ― | 199.35% | ― | -4.16% | -17.19% | |
58 Neutral | $21.67B | 10.60 | -18.43% | 2.42% | 4.66% | -24.45% | |
57 Neutral | $855.11M | 23.95 | 3.42% | ― | -17.69% | ― | |
54 Neutral | $748.89M | ― | 75.95% | ― | 1.75% | 72.30% |
* Technology Sector Average
Performance Comparison
PRCH
Porch Group
7.36
3.21
77.35%
ANGIV
Angi
17.05
-8.75
-33.91%
HSTM
HealthStream
32.09
6.05
23.23%
APPF
AppFolio
225.19
-15.99
-6.63%
RDFN
Redfin
10.21
3.64
55.40%
FVRR
Fiverr International
24.33
3.52
16.91%
Porch Group Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: 94.20% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements, including profitability and strong future guidance, supported by strategic transitions and advancements in their business model. However, there were some challenges, particularly in revenue decline and gross written premium. Overall, the sentiment is optimistic with a strong outlook for 2025.Highlights
Achievement of Adjusted EBITDA Profitability
Porch Group achieved its goal of adjusted EBITDA profitability for the full year 2024, delivering $7 million. The fourth quarter adjusted EBITDA was a record $42 million.
Strong Future Guidance
Porch Group provided adjusted EBITDA guidance of $60 million at the midpoint for 2025, with a 15% margin, marking an over $50 million increase compared to 2024. Revenue guidance for 2025 is set at $400 million.
High Gross Margin Outlook
The company is transitioning to a higher-margin commission and fee-based model with an expected 80% gross margin in 2025.
Formation of Porch Insurance Reciprocal Exchange (PIRE)
The formation of PIRE and the sale of Homeowners of America Insurance Carrier into PIRE were completed, transforming Porch's financial results to be more predictable and higher margin.
Insurance Segment Performance
Porch's insurance segment showed strong 29% organic growth trends, driven by increases in premium per policy.
Vertical Software Revenue Growth
Vertical software segment revenue increased by 6% from the prior year, driven by SaaS price increases.
Advancements in Data and Software
The company launched new AI-powered products and advanced reporting capabilities, enhancing customer retention and satisfaction.
Lowlights
Revenue Decline in Q4 2024
Total revenue for the fourth quarter of 2024 was $100.4 million, a $14.2 million or 12% decrease from the prior year.
Nonrecurring Adjustments Impacting Revenue
A $5 million nonrecurring year-end adjustment reduced revenue and adjusted EBITDA due to the wrap-up of some legacy reinsurance complexities.
Challenges in Gross Written Premium
Gross written premium was $112 million, broadly flat compared to the prior year, affected by the divestiture of the legacy insurance agency, EIG.
Company Guidance
During Porch Group's fourth quarter 2024 earnings call, significant progress towards profitability and growth goals was reported, with the company achieving $7 million in adjusted EBITDA for the full year 2024, surpassing guidance with a record $42 million in adjusted EBITDA for Q4 alone. The call outlined 2025 guidance with an adjusted EBITDA target of $60 million at the midpoint, a 15% margin, and revenue guidance of $400 million. The company anticipates 80% gross margins in 2025, following a transition to a commission and fee-based model with the Porch Insurance Reciprocal Exchange (PIRE). Importantly, Porch Group reaffirmed its 2026 adjusted EBITDA target of $100 million, highlighting its focus on expanding insurance premiums, innovating vertical software, and growing its data business.Porch Group Corporate Events
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.
M&A TransactionsBusiness Operations and Strategy
Porch Group Optimizes Insurance Strategy with PIRE Formation
Positive
Jan 7, 2025
Porch Group, Inc. completed the formation of the Porch Insurance Reciprocal Exchange (PIRE) and sold Homeowners of America Insurance Company (HOAIC) to PIRE. This strategic move is expected to provide more predictable and higher-margin financial results, allowing Porch to scale its insurance operations and enhance profitability for shareholders by leveraging its property data for accurate pricing and tailored solutions.
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.