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Porch Group (PRCH)
NASDAQ:PRCH

Porch Group (PRCH) AI Stock Analysis

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Porch Group

(NASDAQ:PRCH)

Rating:67Neutral
Price Target:
$12.00
▼(-0.74%Downside)
Porch Group's strong earnings performance and positive technical indicators are major strengths. However, financial challenges including negative equity, high debt levels, and valuation concerns weigh on the overall score.
Positive Factors
Growth and Expansion
Porch is raising numbers in a challenging environment due to a rapidly expanding insuretech business, allowing for reinvestment in future growth.
Insurance Division Performance
Porch's insurance division significantly contributed to a $10 million revenue and EBITDA beat.
Refinancing
Porch cleared their last major near-term hurdle by refinancing the 2026 converts.
Negative Factors
Insurance Business Scalability
PRCH's insurance business warrants a discount until it can show independent scalability.
Potential Stock Retreat
There is a possibility the stock may give back gains following presumed short covering.
Valuation Complexity
PRCH's unique structure, business mix, and high leverage make valuation complex.

Porch Group (PRCH) vs. SPDR S&P 500 ETF (SPY)

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 makes money primarily through a combination of software subscription fees, service transaction revenues, and insurance-related services. The company's revenue model is anchored in its ability to offer comprehensive software solutions to home service businesses, which pay recurring subscription fees for access to Porch's tools and services. Additionally, Porch generates transaction-based revenue by facilitating connections between homeowners and service professionals, where it earns fees or commissions for successful job completions. The company also earns revenue from its insurance segment by providing homeowners insurance services, which can include policy underwriting and premium collection, either directly or through partnerships with insurance carriers. Significant partnerships with homebuilders, real estate companies, and insurance firms further contribute to Porch's earnings by expanding its network and customer base.

Porch Group Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q1-2025)
|
% Change Since: 90.69%|
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 Financial Statement Overview

Summary
Porch Group exhibits strong revenue growth but struggles with profitability, reflected in negative net income and EBIT. The balance sheet shows negative equity and high debt levels, posing financial risks. Despite improvements, cash flow remains negative, highlighting ongoing operational challenges.
Income Statement
65
Positive
Porch Group has shown a consistent growth in revenue over the years, with a significant increase from 2020 to 2024. However, the company struggles with profitability, as both net income and EBIT remain negative. The TTM data shows a slight improvement in EBIT margin and EBITDA margin compared to previous annual data, indicating potential operational improvements.
Balance Sheet
45
Neutral
The balance sheet presents a challenging situation for Porch Group, with negative stockholders' equity indicating financial distress. The debt-to-equity ratio is not meaningful due to negative equity, but the high total debt level poses a risk. Despite these issues, the company maintains a reasonable level of cash and equivalents.
Cash Flow
55
Neutral
Porch Group's cash flow shows improvement in free cash flow from previous years, yet remains negative in the TTM period, highlighting ongoing operational challenges. The operating cash flow to net income ratio is negative, suggesting inefficiencies in converting income into cash. Despite improvements, cash flow stability remains a concern.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue427.15M437.85M430.30M275.95M192.43M73.22M
Gross Profit228.07M212.22M210.06M168.37M137.15M55.65M
EBITDA55.30M37.35M-77.07M-116.95M-94.42M-34.34M
Net Income-11.07M-32.83M-133.93M-156.56M-109.08M-51.61M
Balance Sheet
Total Assets802.28M813.97M899.39M1.05B1.03B268.59M
Cash, Cash Equivalents and Short-Term Investments153.99M191.74M294.01M251.58M324.99M196.05M
Total Debt409.16M403.94M435.74M444.30M417.43M47.98M
Total Liabilities834.33M857.19M935.08M969.70M820.00M129.18M
Stockholders Equity-52.42M-43.23M-35.68M79.35M214.57M139.41M
Cash Flow
Free Cash Flow-61.83M-32.20M23.83M-28.94M-39.47M-51.55M
Operating Cash Flow-51.33M-31.68M33.93M-18.49M-34.78M-48.67M
Investing Cash Flow-77.13M-45.06M-56.25M-79.68M-263.43M-10.67M
Financing Cash Flow-21.43M-23.71M90.95M1.98M415.55M259.61M

Porch Group Technical Analysis

Technical Analysis Sentiment
Positive
Last Price12.09
Price Trends
50DMA
9.55
Positive
100DMA
7.72
Positive
200DMA
5.53
Positive
Market Momentum
MACD
0.67
Negative
RSI
68.28
Neutral
STOCH
79.45
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 12.09 is above the 20-day moving average (MA) of 11.07, above the 50-day MA of 9.55, and above the 200-day MA of 5.53, indicating a bullish trend. The MACD of 0.67 indicates Negative momentum. The RSI at 68.28 is Neutral, neither overbought nor oversold. The STOCH value of 79.45 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 (56)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
67
Neutral
$1.25B75.95%-6.81%85.11%
DSDSP
65
Neutral
$832.76M442.194.15%30.64%
62
Neutral
$193.82M-22.66%-25.43%-135.09%
58
Neutral
$703.41M-46.57%-2.39%-2961.26%
58
Neutral
$230.54M-27.44%16.03%30.99%
58
Neutral
$231.91M-24.47%-8.39%7.79%
56
Neutral
$3.18B5.02-5.68%5.66%8.05%-41.83%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PRCH
Porch Group
12.44
10.72
623.26%
FRGE
Forge Global Holdings
18.72
-3.03
-13.93%
ONTF
ON24
5.42
-0.52
-8.75%
SMRT
SmartRent
1.11
-1.26
-53.16%
DSP
Viant Technology
13.31
2.97
28.72%
BMBL
Bumble
6.63
-3.07
-31.65%

Porch Group Corporate Events

Executive/Board ChangesShareholder Meetings
Porch Group Holds Successful Annual Stockholders Meeting
Positive
Jun 16, 2025

On June 11, 2025, Porch Group, Inc. conducted its annual meeting of stockholders, where 88.5% of the company’s voting power was represented. During this meeting, all nominated directors were elected to the board with overwhelming support, Grant Thornton LLP’s appointment as the independent registered public accounting firm was ratified, and the executive compensation package was approved on a non-binding basis.

The most recent analyst rating on (PRCH) stock is a Buy with a $5.00 price target. To see the full list of analyst forecasts on Porch Group stock, see the PRCH Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
Porch Group Completes Major Refinancing Transaction
Positive
May 28, 2025

On May 27, 2025, Porch Group completed its refinancing transactions, repurchasing $144.3 million of its 2026 Notes and issuing $134.0 million of new 2030 Notes. This move aims to retire the majority of its existing debt while minimizing shareholder dilution, positioning the company for future growth and financial stability.

The most recent analyst rating on (PRCH) stock is a Buy with a $5.00 price target. To see the full list of analyst forecasts on Porch Group stock, see the PRCH Stock Forecast page.

Private Placements and Financing
Porch Group Announces Refinancing with New 2030 Notes
Positive
May 20, 2025

On May 19, 2025, Porch Group, Inc. announced a refinancing transaction involving the repurchase of $144.3 million of its 2026 convertible notes and the issuance of $134.0 million in new 2030 notes. This move aims to reduce the company’s debt maturity from $174 million to $29 million by 2026, thereby deleveraging its balance sheet and minimizing shareholder dilution. The 2030 notes, which are convertible and redeemable under specific conditions, are expected to close on May 27, 2025, and will not be registered under the Securities Act.

The most recent analyst rating on (PRCH) stock is a Buy with a $5.00 price target. To see the full list of analyst forecasts on Porch Group stock, see the PRCH Stock Forecast page.

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.

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 02, 2025