Porch Group, Inc. (NASDAQ:PRCH) investors will be delighted, with the company turning in some strong numbers with its latest results. Revenues and losses per share were both better than expected, with revenues of US$51m leading estimates by 9.9%. Statutory losses were smaller than the analystsexpected, coming in at US$0.17 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Porch Group's six analysts is for revenues of US$185.2m in 2021, which would reflect a sizeable 57% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 27% to US$1.45. Before this latest report, the consensus had been expecting revenues of US$178.3m and US$1.36 per share in losses. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although there was a nice uplift to revenue, the consensus also made a modest increase to its losses per share forecasts.
There was no major change to the consensus price target of US$27.17, with growing revenues seemingly enough to offset the concern of growing losses. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Porch Group, with the most bullish analyst valuing it at US$30.00 and the most bearish at US$25.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Porch Group's rate of growth is expected to accelerate meaningfully, with the forecast 145% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 64% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Porch Group is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at US$27.17, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Porch Group going out to 2023, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for Porch Group that you should be aware of.
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