Verdict: Justified
Key finding: A beat and a big raise. Full-year adjusted EBITDA guidance went to $135-140M from $119-125M (+13% at the midpoint) after Q3 adjusted EBITDA rose +116% to $44.5M. Insurance Services revenue grew +39%. The stock gapped +19.4% and closed +28.2% at $20.89 on 7.52M shares (~5x average), above the $18.75 top of its 3-month range. On 10/30 it held (-1.6%) while SMH fell 7.0%.
Scorecard
| Ticker | Rev last Q ($M) | Rev YoY last Q | Rev YoY prior Q | Gross margin (last Q, trend) | Op margin | EPS last Q vs yr ago | P/S | Mkt cap | 1-mo price % |
|---|---|---|---|---|---|---|---|---|---|
| PRCH | 143.9 | +21.8% | +18.1% | 75.0% (from 73.6%) | 12.6% | 0.10 vs -0.10 | 4.02 | $2.1B | +23.4% |
| HIPO | 156.0 | +29.3% | +23.4% | 53.4% (from 33.3%) | 6.5% | 0.33 vs 3.77 | 1.76 | $1.0B | +19.0% |
| HCI | 246.7 | +11.1% | +11.9% | 71.2% (from 57.2%) | 45.0% | 5.60 vs 5.18 | 2.68 | $2.5B | +13.8% |
| LMND | 274.0 | +67.0% | +55.0% | 43.8% (from 39.7%) | -15.3% | -0.56 vs -0.60 | 3.31 | $3.1B | -4.9% |
EPS = GAAP from our data. HCI / LMND rows are their June quarter. Our data shows PRCH revenue +21.8% against a recast year-ago $118.1M; the company reports consolidated revenue +13% (vs $127.3M) and Porch-owned segments +22%.
PRCH is in the middle on growth but leads the growers on margin: revenue +21.8% vs HIPO +29.3% and LMND +67.0%, but its op margin is 12.6% vs HIPO 6.5% and LMND -15.3%.
- Only HCI is more profitable (45% op margin, +11% growth).
- Growth is accelerating (+18.1% to +21.8%). At 4.0x sales PRCH is the most expensive of the four.
Move
- 3-month range: $15.22-$18.75 (60 sessions before the report).
- 10/28 (report day, before the after-close release): -7.7% to $16.30 (low $16.14) on 3.23M shares. Cause not found.
- 10/29: opened $19.46 (gap +19.4%), low $18.74, high $21.30 (new 52-week high), close $20.89 (+28.2%) on 7.52M shares.
- 10/30: an inside day ($19.75-$20.94), close $20.56 (-1.6%) on 2.88M shares. It held the gain on a down day.
- Unfilled gap: $18.12 (10/28 high) to $18.74 (10/29 low).
- 6-month +99.4%. Above the 50-day ($17.23) and 200-day ($12.03).
Catalyst
Q3 2026, released after the close on 10/28 (company 8-K):
- Consolidated revenue $143.9M (+13%). Porch-owned segments (ex-Reciprocal) $140.8M (+22%).
- Insurance Services revenue $102.8M (+39%).
- Net income to Porch $12.2M vs a $10.9M loss a year ago.
- Adjusted EBITDA (ex-Reciprocal) $44.5M (+116%).
- Reciprocal policies written 67.5K (+42%). Written premium $161.0M (+17%). Premium per policy -17%.
- FY26 guide raised (Porch-owned, ex-Reciprocal):
| Metric | Prior | New |
|---|---|---|
| Revenue | $506-517M | $518-523M |
| Gross profit | $419-429M | $438-443M |
| Adj EBITDA | $119-125M | $135-140M |
- Cash $80.1M vs $44.7M at end of 2025.
- Pending: Allied Trust acquisition ($95M base: $75M cash + ~$20M in PRCH shares), expected to close Q1 2027.
Sector
- Home insurers rose in October: HIPO +19.0%, HCI +13.8%; LMND -4.9% (9/30 to 10/30). Hippo also reported 10/29.
- PRCH is not an AI-hardware name, so the 10/30 chip selloff (SMH -7.0%) did not hit it.
Risks
- Convertible debt $467.3M: $333.3M 6.75% secured due 10/2028 and $134.0M 9% due 5/2030. Balance-sheet debt ~$404M vs $80M cash.
- Share count +9% YoY (113.5M vs 104.3M weighted basic); the release does not explain it. The Allied Trust deal adds ~$20M of stock.
- Insider selling: 17 sales from 9/14 to 10/20, $5.17M total, all before the print.
- Insurance exposure: the Reciprocal carries weather / catastrophe risk, and premium per policy fell 17%.
- Valuation: the most expensive of the group on sales (4.0x).
- Next binary: Q4 report, about late Feb 2027 (inference from the 2/20/2026 date).
Judgement
Justified.
- A 13% raise to the EBITDA guide two months before year-end means Q4 is running well above plan.
- Insurance Services (+39%) is the engine.
- The price confirms it: a 3-month range breakout on ~5x volume, then an inside day that kept the whole gain while chips crashed.
Debt and dilution are the weak spots, not the quarter.