Porch Group Inc.

Porch Group Inc. (NASDAQ: PRCH) is a home services vertical software platform that serves over 24,000 home service businesses, including house inspectors, mortgage firms and loan officers, title companies, moving companies, real estate agents, utility providers, roofers, and others. The Vertical Software section and the Insurance segment are two of the company's segments.

Key Highlights

• Matt Ehrlichman, Porch Group's Founder, Chairman, and CEO, acquired 273,128 shares of Porch Group common stock for a total purchase price of roughly USD1 million on May 18th, 2022, according to Porch Group, Inc. The stock was bought on the open market on May 12, 2022.
• Ehrlichman made a previous open market purchase of roughly USD1 million of the Company's common stock on March 17, 2022, and this acquisition is in addition to that. Mr. Ehrlichman now beneficially owns approximately 18.1 million shares, or 17.8% of the total outstanding shares of Porch Group common stock, because of both acquisitions.
• Porch Group, Inc. announced first-quarter revenues of USD62.6 million on May 10th, 2022, in line with corporate estimates, compared to USD26.7 million in the first quarter of 2021.
• In the first quarter of 2022, revenue less cost of revenue was USD41.4 million, or 66.1 percent of total revenue, compared to USD20.8 million, or 77.8% of total revenue in the first quarter of 2021, with roughly USD303 million in cash and cash equivalents at the end of the period.
• The first quarter of 2022 saw a GAAP net loss of USD5.8 million, compared to a GAAP net loss of USD65.1 million in the first quarter of 2021, and an Adjusted EBITDA loss of USD7.1 million, or -11.3 percent of total revenue, in comparison to an Adjusted EBITDA loss of USD9.6 million, or -36 percent of total revenue, in the first quarter of 2021.
  

Stock recommendation

PRCH's stock price has corrected by 82.38% in the past six months and is currently in the lower of its 52-week range of USD 2.83 to USD 27.50.  As can be seen in the chart below, the price is currently below the short-term (50-day) SMA and long-term (200-day) SMA, with RSI at 34.20.

Given the stock's considerable correction in the past six months, financial results, and technical analysis, we propose a "Watch" rating on the stock at its closing price of USD 2.96 as of June 13, 2022.

One Year Technical Chart, as of June 13, 2022. Data Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary

* Entry price as of June 13, 2022.

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decisions should be made depending on the investors' appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above. 

Note 3: The report publishing date is as per the Pacific Time Zone.