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On Wednesday, Benchmark analyst Daniel Kurnos increased the price target for Porch Group Inc. (NASDAQ:PRCH) shares to $10.00, up from the previous target of $7.00, while reiterating a Buy rating on the stock. According to InvestingPro data, two analysts have recently revised their earnings estimates upward for the upcoming period, with analyst targets ranging from $3.50 to $8.00. Kurnos expressed confidence in the company’s leadership and business transformation, suggesting that the initial outlook for 2025 may have been too conservative. He noted that while most of the upside is expected in the latter half of the year, the company’s recent guidance raise indicates a potentially strong performance.
Porch Group’s performance in the fourth quarter, reported in February, has set a positive tone for the year, according to Kurnos. The company has demonstrated strong revenue growth of 19% over the last twelve months, with a healthy gross margin of 44.87%. Despite a significant after-hours stock price increase, he pointed out that the shares are still trading below the levels seen on Investor Day, which took place before the updated and improved outlook was provided. The stock’s beta of 2.02 indicates higher volatility compared to the market.
Kurnos further mentioned that while Porch Group’s management has not adjusted the 2026 outlook yet, the current $100 million target for that year seems likely to be surpassed. He highlighted that the stock is currently trading at only 9 times the 2026 estimated EBITDA based on that $100 million figure.
Additionally, Kurnos underscored that there are more catalysts on the horizon for Porch Group, including what appears to be an increasingly manageable debt maturity situation. He reiterated his belief that Porch Group remains the best small-cap investment idea for the year. With a market capitalization of $586 million, investors seeking deeper insights can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports, which provide essential metrics and expert analysis for informed investment decisions.
In other recent news, Porch Group Inc. reported its fourth-quarter earnings for fiscal year 2024, revealing a revenue of $100.4 million, which was below the forecasted $110.26 million. Despite this revenue miss, the company achieved a significant adjusted EBITDA of $41.8 million for the quarter, marking a considerable increase from the previous year. The full-year revenue for 2024 was $437.8 million, reflecting a modest 2% increase from the prior year. Porch Group has set its 2025 revenue guidance between $390 million and $410 million, with an adjusted EBITDA target of $55 million to $65 million.
In a strategic move, Porch Group restructured its insurance business into a Reciprocal Exchange insurance model, which is expected to enhance profit margins and mitigate financial risk. Loop Capital recently upgraded Porch Group’s stock from "Hold" to "Buy," reaffirming a price target of $6.00, highlighting the company’s strong financial health and strategic initiatives. Porch Group’s management expressed confidence in maintaining an 80% gross margin and improving the EBITDA margin by over 1000 basis points in 2025. The company aims to achieve $500 million in gross written premium in 2025, with a long-term goal of $3 billion over the next 5 to 10 years.
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