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

PRA Group (NASDAQ:PRAA) released its quarterly earnings data 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 22.51% and a positive return on equity of 13.19%.

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 Up 5.6%

NASDAQ:PRAA traded up $0.96 during mid-day trading on Thursday, hitting $18.15. 472,585 shares of the stock traded hands, compared to its average volume of 323,395. The stock has a market capitalization of $692.26 million, a price-to-earnings ratio of -2.53 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 firm’s 50 day moving average is $17.00 and its two-hundred day moving average is $16.58.

Institutional Trading of PRA Group

Institutional investors have recently added to or reduced their stakes in the company. Brooklyn Investment Group grew its position in PRA Group by 15.5% in the 4th quarter. Brooklyn Investment Group now owns 15,650 shares of the business services provider’s stock valued at $277,000 after acquiring an additional 2,099 shares during the last quarter. Intech Investment Management LLC lifted its position in shares of PRA Group by 10.7% during the third quarter. Intech Investment Management LLC now owns 20,382 shares of the business services provider’s stock worth $315,000 after purchasing an additional 1,963 shares during the last quarter. Brevan Howard Capital Management LP bought a new stake in shares of PRA Group during the second quarter worth $342,000. Lighthouse Investment Partners LLC purchased a new stake in shares of PRA Group during the second quarter valued at $341,000. Finally, The Manufacturers Life Insurance Company boosted its stake in shares of PRA Group by 5.6% during the second quarter. The Manufacturers Life Insurance Company now owns 14,523 shares of the business services provider’s stock valued at $214,000 after purchasing an additional 768 shares during the period. Institutional investors own 97.22% of the company’s stock.

Wall Street Analysts Forecast Growth

A number of brokerages recently commented on PRAA. Wall Street Zen downgraded shares of 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 note on Wednesday, June 24th. One analyst has rated the stock with a Buy rating, three have assigned a Hold rating and one has given a Sell rating to the company’s stock. Based on data from MarketBeat, the stock has an average rating of “Hold” and an average price target of $26.00.

About PRA Group

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.