Porch Group, Inc. Just Reported A Surprise Profit And Analysts Updated Their Estimates

Shareholders will be ecstatic, with their stake up 77% over the past week following Porch Group, Inc.'s (NASDAQ:PRCH) latest quarterly results. In addition to smashing expectations with revenues of US$105m, Porch Group delivered a surprise statutory profit of US$0.08 per share, a notable improvement compared to analyst expectations of a loss. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

We've discovered 2 warning signs about Porch Group. View them for free.

Taking into account the latest results, the current consensus from Porch Group's six analysts is for revenues of US$463.8m in 2025. This would reflect a solid 8.6% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 78% to US$0.023. Before this latest report, the consensus had been expecting revenues of US$399.1m and US$0.12 per share in losses. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.

Check out our latest analysis for Porch Group

The consensus price target rose 25% to US$10.00, with the analysts encouraged by the higher revenue and lower forecast losses for next year. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Porch Group at US$14.00 per share, while the most bearish prices it at US$6.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. 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. Compare this to the 404 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 12% per year. So it's pretty clear that, while Porch Group's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. 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 industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Porch Group going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Porch Group , and understanding them should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.