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On Wednesday, Keefe, Bruyette & Woods raised the price target for Porch Group Inc. (NASDAQ:PRCH) shares from $6.00 to $7.00, while keeping a Market Perform rating on the stock. The adjustment follows Porch Group’s first-quarter earnings, which revealed an Adjusted EBITDA of $16.9 million, surpassing both Keefe, Bruyette & Woods and consensus estimates of $5.6 million and $5.8 million, respectively. The increase was attributed to lower operating expenses and a boost in revenue from Insurance Services.
Porch Group also revised its EBITDA guidance for 2025 upwards by 8% and its long-term EBITDA target by 10%. The management team expressed confidence in the company’s growth trajectory, especially after the completion of the reciprocal exchange transaction with Porch Insurance Reciprocal Exchange (PIRE). The company’s focus is on expanding its reciprocal written premium (RWP) to capture a larger share of the market.
The firm’s analysts have adjusted their estimates in response to the stronger Insurance Services revenue, which has been bolstered by higher RWP and take rates. The new price target of $7.00 is based on a multiple of 14 times the projected 2026 EBITDA, which remains unchanged from previous valuations.
The analyst’s commentary highlighted the complexity in valuing Porch Group due to its unique structure, varied business mix, and high leverage. Despite acknowledging the company’s positive momentum, the firm chose to maintain its Market Perform rating, indicating a neutral outlook on the stock’s current valuation. InvestingPro analysis suggests the stock is currently fairly valued, with analyst targets ranging from $6 to $10 per share. For deeper insights into Porch Group’s valuation and 12 additional exclusive ProTips, explore the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Porch Group Inc. reported impressive first-quarter 2025 financial results, surpassing Wall Street expectations. The company achieved an earnings per share (EPS) of $0.08, notably outperforming the anticipated loss of $0.10. Revenue reached $104.7 million, exceeding the forecasted $79.39 million. These results highlight effective cost management and strategic initiatives that have contributed to the company’s strong financial performance. Porch Group has also increased its revenue guidance for 2025 to a range of $400 million to $420 million, reflecting confidence in continued growth. Additionally, the company projects an adjusted EBITDA of $60 million to $70 million for the year. Porch Group’s strategic shift away from catastrophic weather claims has resulted in reduced risk exposure and improved operational efficiency. The company has maintained high gross margins, with the Insurance Services segment achieving an 85% margin.
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