Head-To-Head Survey: PRA Group (PRAA) & The Advisory Board (ABCO)

PRA Group (NASDAQ: PRAA) and The Advisory Board (NASDAQ:ABCO) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, analyst recommendations, institutional ownership, earnings, dividends and risk.

Profitability

This table compares PRA Group and The Advisory Board’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PRA Group 9.76% 4.69% 1.41%
The Advisory Board 13.65% 12.69% 3.30%

Risk & Volatility

PRA Group has a beta of 1.5, meaning that its share price is 50% more volatile than the S&P 500. Comparatively, The Advisory Board has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for PRA Group and The Advisory Board, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PRA Group 0 0 3 0 3.00
The Advisory Board 1 10 3 0 2.14

PRA Group presently has a consensus price target of $38.00, suggesting a potential upside of 32.17%. The Advisory Board has a consensus price target of $51.21, suggesting a potential downside of 4.15%. Given PRA Group’s stronger consensus rating and higher probable upside, equities research analysts plainly believe PRA Group is more favorable than The Advisory Board.

Earnings & Valuation

This table compares PRA Group and The Advisory Board’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PRA Group $784.13 million 1.66 $280.49 million $1.64 17.53
The Advisory Board $799.15 million 2.72 $120.83 million $2.69 19.86

PRA Group has higher revenue, but lower earnings than The Advisory Board. PRA Group is trading at a lower price-to-earnings ratio than The Advisory Board, indicating that it is currently the more affordable of the two stocks.

Summary

The Advisory Board beats PRA Group on 7 of the 11 factors compared between the two stocks.

About PRA Group

PRA Group, Inc. (PRA Group) is a financial and business services company with operations in the Americas and Europe. The Company’s primary business is the purchase, collection and management of portfolios of nonperforming loans. The Company operates through the account receivables management segment. It also provides fee-based services, such as vehicle location, skip tracing and collateral recovery for auto lenders, government entities and law enforcement; revenue administration, audit and revenue discovery/recovery services for local government entities; class action claims recovery services and purchases; servicing of consumer bankruptcy accounts in the United States, and contingent collections of nonperforming loans in Europe and South America. The Company’s portfolio of nonperforming loans includes a set of accounts that can be categorized by asset type, age and size of account, level of previous collection efforts, payment history, and geography.

About The Advisory Board

The Advisory Board Company is a provider of software and solutions to the healthcare and higher education industries. The Company offers subscription-based membership programs, software and data-enabled services. All of its programs are rooted in best practices and extends across four areas, including Best practices research, Technology, Data-enabled services and Consulting services. The best practices research and insight programs provide the foundation for all of its other programs. The Company offers technology analytics programs anchored by cloud-based software applications that surface performance improvement opportunities to accelerate progress. Through its consulting services, the Company provides on-the-ground support for performance improvement initiatives, as well as best practice professional management of areas of the hospital or medical group. The Company’s data-enabled services are primarily focused in the area of enrollment management.

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