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

PRA Group (NASDAQ:PRAA) issued its earnings results on Thursday. The business services provider reported $1.51 EPS for the quarter, topping analysts’ consensus estimates 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 Price Performance

NASDAQ PRAA traded up $0.96 during midday trading on Thursday, hitting $18.15. 472,585 shares of the company traded hands, compared to its average volume of 323,395. PRA Group has a 52 week low of $10.25 and a 52 week high of $22.55. The company’s 50-day simple moving average is $17.00 and its 200-day simple moving average is $16.58. The company has a market cap of $692.26 million, a PE ratio of -2.53 and a beta of 1.11.

Institutional Investors Weigh In On PRA Group

Hedge funds have recently made changes to their positions in the stock. Topline Capital Management LLC lifted its holdings in shares of PRA Group by 168.3% during the 2nd quarter. Topline Capital Management LLC now owns 2,250,629 shares of the business services provider’s stock valued at $33,197,000 after purchasing an additional 1,411,707 shares during the last quarter. Millennium Management LLC grew its stake in PRA Group by 242.6% during the 4th quarter. Millennium Management LLC now owns 464,320 shares of the business services provider’s stock worth $8,214,000 after buying an additional 328,804 shares during the last quarter. Jane Street Group LLC increased its position in PRA Group by 256.7% during the 4th quarter. Jane Street Group LLC now owns 397,207 shares of the business services provider’s stock valued at $7,027,000 after buying an additional 285,858 shares in the last quarter. Ameriprise Financial Inc. increased its position in PRA Group by 130.9% during the 2nd quarter. Ameriprise Financial Inc. now owns 428,135 shares of the business services provider’s stock valued at $6,315,000 after buying an additional 242,721 shares in the last quarter. Finally, Wellington Management Group LLP raised its stake in PRA Group by 13.7% in the fourth quarter. Wellington Management Group LLP now owns 1,296,830 shares of the business services provider’s stock valued at $22,941,000 after buying an additional 156,520 shares during the last quarter. 97.22% of the stock is currently owned by hedge funds and other institutional investors.

Wall Street Analyst Weigh In

Several research firms have commented on PRAA. Wall Street Zen downgraded PRA Group from a “strong-buy” rating to a “buy” rating in a report on Sunday, June 7th. Weiss Ratings reiterated a “sell (d)” rating on shares of PRA Group in a 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 company. According to MarketBeat.com, the stock presently has an average rating of “Hold” and a consensus target price 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.