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  "documentTitle": "Porch Group Inc (PRCH)",
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  "authorName": "Ben Axler",
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  "presentationDate": "2021-04-08 00:00:00",
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  "notes": "Includes a red flag callout regarding accounting reclassifications.",
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      "text": "During 2016, expenses were reclassified from sales and marketing expenses to cost of revenue and general and administration for one of our businesses. The expenses moved to cost of revenue are traffic acquisition costs in nature and more appropriately classified as costs of revenue, and the other costs more appropriately classified as general and administrative expenses. For 2015, $994,000 was reclassified from sales and marketing to cost of revenue and $290,000 was reclassified from sales and marketing to general and administrative expense.",
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      "text": "During 2016, expenses were reclassified from sales and marketing expenses to cost of revenue and general and administration for one of our businesses. The expenses moved to cost of revenue are traffic acquisition costs in nature and more appropriately classified as costs of revenue, and the other costs more appropriately classified as general and administrative expenses.",
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      "text": "EV / Revenue: 2.6x",
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      "text": "We believe another instructive valuation benchmark for Porch is Red Ventures' acquisition of Bankrate (RATE) in 2017. The business was acquired for approximately $1.4 billion. RATE is a website with financial content verticals, notably mortgages and home lending, which provides leads to home care and service providers. RATE was acquired for 2.6x and 2.2x current year and next year revenues, and was also cash flow positive when acquired. Porch is deeply cash flow negative. As a side note, in 2015 RATE executives were charged with accounting fraud.(1) In 2016, there were expense reclassifications to move certain traffic acquisition costs to cost of revenue. This is interesting insofar as we believe Porch also does not accurately classify certain lead costs.",
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      "text": "During 2016, expenses were reclassified from sales and marketing expenses to cost of revenue and general and administration for one of our businesses. The expenses moved to cost of revenue are traffic acquisition costs in nature and more appropriately classified as costs of revenue, and the other costs more appropriately classified as general and administrative expenses. For 2015, $994,000 was reclassified from sales and marketing to cost of revenue and $290,000 was reclassified from sales and marketing to general and administrative expense. — 2016 10-K",
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      "text": "Source: 2016 10-K; Bankrate Fairness Opinion and Deal Announcement; 1) SEC Charges Bankrate and Former Executives With Accounting Fraud",
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      "text": "Bankrate Deal Valuation From Management Projections",
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      "text": "Instructive To Look At Red Ventures' Acquisition of Bankrate As A Valuation Data Point",
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