Porch Group, Inc. (NASDAQ:PRCH) Analysts Just Slashed Next Year's Revenue Estimates By 12%

Porch Group, Inc. (NASDAQ:PRCH) investors are facing a rude awakening after analysts recently revised their revenue estimates for the company, slashing next year's projections by a significant 12%. This dramatic change in outlook comes on the heels of Porch Group's third-quarter earnings report, which missed analyst expectations. The company's revenue of $110.84 million fell short of the $116.28 million consensus estimate, while earnings per share (EPS) also missed expectations, coming in at -$0.65 compared to the -$0.53 estimate.
The disappointing earnings report has led analysts to reevaluate their growth projections for Porch Group. Full-year 2024 revenue estimates have been revised down by 12%, from $457.19 million to $458.42 million, while 2025 revenue estimates have been reduced by 1.9%, from $493.33 million to $483.91 million. Additionally, analysts have increased their loss per share estimates for next year, from -$0.68 to -$0.77, reflecting their concerns about the company's financial performance.

Porch Group's revised estimates suggest a significant slowdown in growth compared to its historical performance and the broader industry. The company's vertical software and insurance platform is expected to grow at an annualized rate of 5.3% by the end of 2025, a substantial reduction from the 40% annual growth experienced over the past five years. In contrast, the software industry is projected to grow at a 12% annual rate, indicating that Porch Group's revised estimates fall significantly short of industry averages.
The analysts' downgrade of Porch Group's revenue estimates is primarily driven by two key factors. First, the company's Q3 2024 results missed revenue expectations, indicating a slowdown in growth. Second, the analysts have revised their growth projections for the industry, expecting aggregate revenue to grow by 12% per year, while Porch Group's revenue is now forecasted to decline at an annualized rate of 5.3% by the end of 2025. This substantial reduction in growth prospects suggests that Porch Group is expected to underperform the broader industry.
Despite the bearish outlook, the average price target for Porch Group has held steady at $3.92, suggesting that analysts still see long-term potential in the company. However, the wide range of estimates, from $1.50 to $7.00 per share, underscores the divergent views on Porch Group's future performance. Investors should carefully consider the potential implications of these revised estimates on Porch Group's stock price and valuation, as well as the company's strategic positioning and growth prospects in the software industry.
In conclusion, Porch Group investors are grappling with a significant revision to the company's revenue estimates, with analysts slashing next year's projections by 12%. This dramatic change in outlook is driven by the company's disappointing earnings report and a slowdown in growth compared to industry peers. While the average price target remains relatively unchanged, the wide range of estimates highlights the divergent views on Porch Group's future performance. Investors should closely monitor the company's progress and reassess their positions in light of these revised estimates.