PRA Group (NASDAQ:PRAA) Releases Earnings Results, Beats Expectations By $0.99 EPS

PRA Group (NASDAQ:PRAA) issued its earnings results on Thursday. The business services provider reported $1.51 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.52 by $0.99, Zacks reports. PRA Group had a positive return on equity of 13.19% and a negative net margin of 22.51%.The business had revenue of $372.17 million during the quarter, compared to analysts’ expectations of $299.99 million.

Here are the key takeaways from PRA Group’s conference call:

• Cash collections rose 4% year over year to $559 million, while adjusted EBITDA increased 10% to $1.4 billion and net leverage declined to 2.67x. Net income attributable to PRA reached $58 million, or $1.51 per diluted share.
• A review of European portfolios increased estimated remaining collections by $349 million, reflecting six years of outperformance; management expects roughly $260 million of additional portfolio income over the portfolios’ remaining lives.
• PRA implemented another round of cost reductions, eliminating 135 corporate and offshore roles and targeting approximately $20 million in annualized net savings, while also consolidating call centers and launching its U.S. omnichannel contact platform.
• U.S. legal collections grew 26% to $150 million and digital channels accounted for nearly half of new payment plans, but legal collection costs will continue rising as more accounts enter the channel, albeit at a slower rate than in 2024 and 2025.
• The board authorized a new $150 million share repurchase program; PRA also refinanced its $730 million European credit facility, extended its maturity by five years, and reported no debt maturities until February 2028.

PRA Group Price Performance

PRAA traded up $1.64 on Friday, reaching $19.79. The company’s stock had a trading volume of 1,098,621 shares, compared to its average volume of 547,708. PRA Group has a 1 year low of $10.25 and a 1 year high of $22.55. The business’s 50 day moving average is $17.00 and its 200 day moving average is $16.58. The stock has a market cap of $754.81 million, a price-to-earnings ratio of -2.76 and a beta of 1.11.

Wall Street Analyst Weigh In

A number of research firms have weighed in on PRAA. Wall Street Zen cut PRA Group from a “strong-buy” rating to a “buy” rating in a report on Sunday, June 7th. Weiss Ratings reissued a “sell (d)” rating on shares of PRA Group in a research report on Wednesday, June 24th. One analyst has rated the stock with a Buy rating, three have assigned a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat, the stock currently has a consensus rating of “Hold” and a consensus target price of $26.00.

Hedge Funds Weigh In On PRA Group

Institutional investors have recently made changes to their positions in the business. Topline Capital Management LLC grew its position in shares of PRA Group by 168.3% during the second quarter. Topline Capital Management LLC now owns 2,250,629 shares of the business services provider’s stock worth $33,197,000 after buying an additional 1,411,707 shares in the last quarter. State Street Corp increased its position in shares of PRA Group by 0.3% in the 4th quarter. State Street Corp now owns 1,499,488 shares of the business services provider’s stock worth $26,526,000 after purchasing an additional 4,895 shares during the last quarter. Wellington Management Group LLP increased its position in shares of PRA Group by 13.7% in the 4th quarter. Wellington Management Group LLP now owns 1,296,830 shares of the business services provider’s stock worth $22,941,000 after purchasing an additional 156,520 shares during the last quarter. Invesco Ltd. raised its stake in shares of PRA Group by 15.5% in the 2nd quarter. Invesco Ltd. now owns 819,742 shares of the business services provider’s stock valued at $12,091,000 after purchasing an additional 109,857 shares in the last quarter. Finally, Charles Schwab Investment Management Inc. lifted its position in shares of PRA Group by 14.5% during the fourth quarter. Charles Schwab Investment Management Inc. now owns 752,064 shares of the business services provider’s stock worth $13,304,000 after purchasing an additional 95,179 shares during the last quarter. 97.22% of the stock is owned by institutional investors and hedge funds.

PRA Group Company Profile

PRA Group, Inc is a global specialty finance company focused on the acquisition and management of nonperforming loans. Founded in 1996 as Portfolio Recovery Associates, the company purchases defaulted consumer and commercial receivables at discounted rates from financial institutions, utilities and other creditors. By combining rigorous analytics with a consumer-centric ethos, PRA Group seeks to maximize recoveries while maintaining respectful and compliant interactions with debtors.

The company’s core activities include first-party and third-party collections across a range of asset classes such as credit cards, auto loans and utility receivables.