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Celebrations may be in order for Porch Group, Inc. (NASDAQ:PRCH) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Investors have been pretty optimistic on Porch Group too, with the stock up 62% to US$10.31 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.
Following the upgrade, the most recent consensus for Porch Group from its six analysts is for revenues of US$464m in 2025 which, if met, would be a notable 8.6% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 78% to US$0.023 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$399m and losses of US$0.12 per share in 2025. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
View our latest analysis for Porch Group
It will come as no surprise to learn that the analysts have increased their price target for Porch Group 25% to US$10.00 on the back of these upgrades.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Porch Group's revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2025 being well below the historical 35% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% annually. Factoring in the forecast slowdown in growth, it looks like Porch Group is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Porch Group is moving incrementally towards profitability. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Porch Group.