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

PRA Group (NASDAQ:PRAA) announced its earnings results on Thursday. The business services provider reported $1.51 EPS for the quarter, beating the consensus estimate of $0.52 by $0.99, Zacks reports. PRA Group had a negative net margin of 19.91% and a positive return on equity of 15.86%. The company had revenue of $372.17 million during the quarter, compared to the consensus estimate 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 Stock Performance

NASDAQ PRAA opened at $19.79 on Friday. The company has a market capitalization of $754.79 million, a PE ratio of -2.94 and a beta of 1.11. PRA Group has a 52-week low of $10.25 and a 52-week high of $22.55. The company has a 50-day simple moving average of $17.09 and a 200 day simple moving average of $16.60.

Wall Street Analysts Forecast Growth

A number of equities research analysts have issued reports 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 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 given a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat, PRA Group has an average rating of “Hold” and a consensus price target of $26.00.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently modified their holdings of PRAA. Los Angeles Capital Management LLC bought a new stake in shares of PRA Group in the 4th quarter worth approximately $27,000. Tower Research Capital LLC TRC grew its holdings in PRA Group by 375.1% during the second quarter. Tower Research Capital LLC TRC now owns 4,784 shares of the business services provider’s stock valued at $71,000 after purchasing an additional 3,777 shares during the period. Globeflex Capital L P bought a new position in PRA Group during the second quarter valued at $102,000. iSAM Funds UK Ltd purchased a new stake in PRA Group in the third quarter worth $107,000. Finally, Dynamic Technology Lab Private Ltd purchased a new stake in PRA Group in the third quarter worth $156,000. 97.22% of the stock is owned by institutional investors.

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.