PRA Group (NASDAQ:PRAA) Issues Quarterly Earnings Results, Beats Estimates By $0.99 EPS

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

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 Trading Up 9.0%

Shares of PRAA traded up $1.64 during trading hours on Friday, reaching $19.79. 1,098,621 shares of the stock traded hands, compared to its average volume of 547,708. PRA Group has a 52-week low of $10.25 and a 52-week high of $22.55. The company’s 50-day moving average price is $17.00 and its two-hundred day moving average price is $16.58. The company has a market cap of $754.81 million, a P/E ratio of -2.76 and a beta of 1.11.

Analyst Ratings Changes

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

Institutional Trading of PRA Group

Institutional investors and hedge funds have recently added to or reduced their stakes in the business. Topline Capital Management LLC lifted its holdings in shares of PRA Group by 168.3% in 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 raised its stake in PRA Group by 0.3% during the fourth quarter. State Street Corp now owns 1,499,488 shares of the business services provider’s stock valued at $26,526,000 after purchasing an additional 4,895 shares in the last quarter. Wellington Management Group LLP increased its holdings 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 buying an additional 156,520 shares during the last quarter. Invesco Ltd. raised its position in PRA Group by 15.5% during the second 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 during the period. Finally, Charles Schwab Investment Management Inc. lifted its position in PRA Group by 14.5% in 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 buying an additional 95,179 shares during the last quarter. Institutional investors own 97.22% of the company’s stock.

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.