Core Insights - PRA Group, Inc. (PRAA) is positioned for growth due to improved cash collection efficiency in the U.S. and increased portfolio income, leveraging its extensive infrastructure and relationships in the consumer debt market [1][3] Financial Performance - In Q3 2025, PRAA reported total cash collections of $542.2 million, marking a 13.7% year-over-year increase, driven by successful portfolio acquisitions and strong debtor recovery in the U.S. and Europe [3][10] - The adjusted cash efficiency ratio improved to 61.3% in the first nine months of 2025, up from 59% in the previous year [3] - The consensus estimate for PRAA's 2025 earnings per share is $1.45, reflecting an 8.2% increase over the past month, with a projected 55.2% rise for 2026 [5] - Revenue estimates for 2025 stand at $1.17 billion, indicating a 5.4% year-over-year increase, with expectations for a further 7.3% increase in 2026 [6][10] Strategic Focus - Total portfolio purchases in the last quarter were $255.5 million, indicating a strategic shift towards selective and value-oriented buying, with a target of $1.2 billion in total portfolio purchases for 2025 [4][10] - This disciplined approach aims to preserve long-term returns by avoiding overpayment for portfolios and focusing on non-performing loans that meet return thresholds [4] Market Position - PRA Group operates in the Americas, Australia, and Europe, with a market capitalization of nearly $667 million, and is currently rated as a Zacks Rank 2 (Buy) stock [2]

A month has gone by since the last earnings report for PRA Group (PRAA) . Shares have added about 27.1% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is PRA Group due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.PRA Group Q3 Earnings Beat Estimates on Increasing Cash C ...

Core Insights - Investing in stocks based on valuation metrics, particularly the price-to-sales (P/S) ratio, can identify opportunities with strong upside potential, especially for unprofitable or early-stage companies [1][2][3] Valuation Metrics - The P/S ratio compares a company's market capitalization to its revenues, providing a clearer picture of value when earnings are minimal or volatile [2][5] - A P/S ratio below 1 indicates a good bargain, as investors pay less than a dollar for each dollar of revenue generated [6] - The P/S ratio is often preferred over the price-to-earnings (P/E) ratio due to the difficulty of manipulating sales figures compared to earnings [7] Investment Opportunities - Low P/S stocks can offer compelling opportunities, often trading below their intrinsic value, making them attractive for investors seeking upside potential [3][10] - Companies such as Hamilton Insurance Group, Macy's Inc., Cognizant Technology Solutions, PCB Bancorp, and PRA Group have low P/S ratios and potential for higher returns [4][10] Company Profiles - **Hamilton Insurance Group**: Operates in specialty insurance and reinsurance, benefiting from strong execution and a clear growth roadmap, with gross premiums written rising significantly [12][13] - **Macy's Inc.**: Undergoing a transformation with its Bold New Chapter program, focusing on digital initiatives and omnichannel retailing, currently holds a Value Score of A and Zacks Rank 2 [14][15] - **Cognizant Technology Solutions**: A leading professional services company with strong growth in Health Sciences and Financial Services, bolstered by acquisitions and AI initiatives [16][17] - **PCB Bancorp**: Offers a range of banking products and services, strategically positioned for sustained growth, currently holds a Value Score of A and Zacks Rank 2 [18][19] - **PRA Group**: Focuses on the purchase and management of non-performing loans, benefiting from strategic acquisitions and a positive purchasing environment, currently holds a Value Score of A and Zacks Rank 2 [20][21]

Core Viewpoint - PRA Group (PRAA) has shown a 9% gain over the past four weeks, with a mean price target of $22.67 indicating a potential upside of 42% from the current price of $15.97 [1] Price Targets and Analyst Estimates - The mean estimate consists of three short-term price targets with a standard deviation of $4.16, where the lowest estimate is $18.00 (12.7% increase) and the highest is $26.00 (62.8% increase) [2] - A low standard deviation among price targets suggests a strong agreement among analysts regarding the stock's price movement [9] Earnings Estimates and Analyst Sentiment - Analysts have shown strong agreement in revising earnings per share (EPS) estimates higher, which correlates with potential stock price increases [11] - The Zacks Consensus Estimate for the current year has increased by 10.3% over the past month, with two estimates going higher and no negative revisions [12] - PRAA holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] Caution on Price Targets - Solely relying on consensus price targets for investment decisions may not be wise, as analysts' price targets can often be overly optimistic due to business incentives [3][8] - While price targets should not be ignored, they should be approached with skepticism, as they may not accurately predict stock price movements [10]

Core Insights - PRA Group, Inc. is a global leader in acquiring and collecting nonperforming loans, with management scheduled to participate in several upcoming investor events [1][3]. Event Participation - The company will attend the Citizens Financial Services Conference on November 18, 2025, with President and CEO Martin Sjolund and CFO Rakesh Sehgal participating in 1x1 and small group meetings [1]. - On December 2, 2025, PRA Group will be present at the Bank of America Leveraged Finance Conference, featuring CFO Rakesh Sehgal and VP of Investor Relations Najim Mostamand in 1x1 meetings and a fireside chat [1]. - The Jefferies Specialty Finance Crossover Conference is scheduled for December 11, 2025, where Martin Sjolund, Rakesh Sehgal, and Najim Mostamand will engage in 1x1 and small group meetings [1]. - An invitation-only Arctic Securities Nordic Debt Collection Webinar will take place on January 9, 2026, with Martin Sjolund as the speaker [1]. Company Overview - PRA Group, Inc. focuses on returning capital to banks and creditors, aiding in the expansion of financial services for consumers across the Americas, Europe, and Australia [1]. - The company employs thousands globally and collaborates with customers to help resolve their debt [1].

Core Viewpoint - PRA Group (PRAA) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - For PRA Group, the Zacks Consensus Estimate for the fiscal year ending December 2025 is projected at $1.45 per share, unchanged from the previous year, but has seen a 10.3% increase in estimates over the past three months [8]. Institutional Investor Influence - Institutional investors utilize earnings estimates to determine the fair value of stocks, and their buying or selling actions based on these estimates can lead to significant price movements [4]. Zacks Rank System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of PRA Group to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for higher stock prices in the near term [10].

Financial Performance - Portfolio income for Q3 2025 was $258.5 million, a 19.6% increase compared to Q3 2024[89] - Total revenues for Q3 2025 were $311.1 million, a 10.5% increase from $281.5 million in Q3 2024[89] - The company reported a net loss of $407.7 million for Q3 2025, a decrease of $434.9 million compared to the prior year[88] - Adjusted net income attributable to PRA Group, Inc. for Q3 2025 was $20,877,000, compared to $27,154,000 in Q3 2024, reflecting a decrease of 23.4%[127] - The adjusted ROATE for Q3 2025 was 9.3%, down from 14.3% in Q3 2024, indicating a decline in return on adjusted tangible equity[127] Cash Collections - Cash collections reached $542.2 million, reflecting a 13.7% increase year-over-year, with $333.7 million from the Americas and $208.6 million from Europe[88] - Total cash collections in Q3 2025 were $542.2 million, an increase of $65.1 million, or 13.7%, compared to $477.1 million in Q3 2024[98] - Year-to-date cash collections were $1.6 billion in 2025, an increase of $175.5 million, or 12.5%, compared to $1.4 billion in 2024[99] - Core cash collections in the Americas and Australia for Q3 2025 were $310,108,000, representing a 16.1% increase from $266,977,000 in Q3 2024[136] - The company reported a total cash collection adjusted for foreign currency at $542,244,000 for Q3 2025, compared to $487,294,000 in Q3 2024[136] Operating Expenses - Total operating expenses surged to $626.7 million, a 227.3% increase compared to the prior year period[89] - Total operating expenses in Q3 2025 were $626.7 million, an increase of $435.2 million, or 227.3%, compared to $191.5 million in Q3 2024[104] - Compensation and benefits expense was $74.2 million in Q3 2025, a decrease of $1.9 million, or 2.5%, compared to Q3 2024[105] - Legal collection costs in Q3 2025 increased by $18.0 million, or 62.5%, compared to Q3 2024, driven by expansion in U.S. legal collections[106] Goodwill and Impairment - Goodwill impairment charge of $412.6 million was recorded in Q3 2025 due to a sustained decrease in stock price[88] - A goodwill impairment charge of $412.6 million was recorded in Q3 2025 related to the DBC reporting unit[110] - Goodwill decreased by $369.5 million, or 93.2%, to $26.9 million as of September 30, 2025, due to the goodwill impairment charge[114] Debt and Equity - The company issued €300 million in senior notes due 2032, marking its first bond offering in Europe[87] - Total stockholders' equity decreased by 23.8% to $928.5 million compared to the previous year[89] - Total stockholders' equity decreased by $206.5 million, or 18.2%, to $928.5 million as of September 30, 2025, primarily due to the net loss for the period[116] - Borrowings increased by $280.4 million, or 8.4%, to $3.6 billion as of September 30, 2025, following the issuance of €300.0 million in senior notes[115] Collections and Portfolio Performance - Total estimated remaining collections (ERC) for the company reached $8.4 billion, with $3.6 billion from the U.S. and $515.8 million from other Americas and Australia[135] - Total estimated collections for the Americas and Australia Core from 1996 to 2025 amount to $19,326,066, with a current purchase price multiple of 287% for the 1996-2014 period[137] - The total estimated collections for Europe Core from 1996 to 2025 are $10,771,841, with a current purchase price multiple of 332% for the 1996-2014 period[137] - The total PRA Group's estimated collections amount to $34,204,846, with total cash collections of $1,575,968 in 2025[137] Liquidity and Cash Management - The company actively manages liquidity to meet business needs and financial obligations, ensuring financial stability[148] - As of September 30, 2025, cash and cash equivalents totaled $107.5 million, with $96.3 million held by international operations[149] - The company had $3.6 billion in outstanding borrowings, with estimated interest, unused fees, and principal payments for the next 12 months amounting to $249.8 million[157] - Forward flow agreements for the purchase of nonperforming loans are estimated at approximately $297.8 million over the next 12 months, with $235.4 million for the Americas and Australia and $62.4 million for Europe[156] Foreign Exchange and Other Financial Effects - The net effect of foreign exchange rates on cash increased by $18.4 million compared to the prior year, primarily due to the weakening of the U.S. dollar[168]

Core Insights - PRA Group, Inc. (PRAA) reported a 0.7% increase in shares following the release of its third-quarter 2025 results, driven by improved cash collections and higher portfolio income, although this was partially offset by rising operating costs [1][5] Financial Performance - Earnings per share (EPS) for Q3 2025 were 53 cents, exceeding the Zacks Consensus Estimate by 6% and up from 49 cents per share a year ago [1][10] - Total revenues increased by 10.5% year over year to $311.1 million, surpassing the consensus mark by 4.7% [2][10] Cash Collections and Portfolio Income - Cash collections reached $542.2 million, a 13.7% year-over-year increase, beating the Zacks Consensus Estimate of $531 million, supported by higher collections in the U.S. and Europe [3][10] - Portfolio income rose 19.6% year over year to $258.5 million, although it fell short of the consensus estimate of $261 million [4] Operating Expenses and Losses - Total operating expenses surged to $626.7 million from $191.5 million a year ago, primarily due to increased legal collection costs and other operational expenses [5] - The company recorded a net loss of $404 million, contrasting with a net income of $28.9 million in the same quarter last year [5] Asset and Equity Position - As of September 30, 2025, PRA Group had cash and cash equivalents of $107.5 million, up from $105.9 million at the end of 2024, and total assets increased to $5 billion from $4.9 billion [7] - Total equity declined by 17.6% from the end of 2024, amounting to $984 million [8] Future Outlook - Management projects portfolio investments of $1.2 billion for 2025, with cash collections expected to grow in the high single digits due to strong portfolio purchases [9] - The cash efficiency ratio is anticipated to exceed 60% in 2025, with a forecasted return on average tangible equity of around 12% [9]

Group 1 - PRA Group (PRAA) shares have increased by 10.1% over the past four weeks, closing at $14.75, with a mean price target of $22.67 indicating a potential upside of 53.7% [1] - The mean estimate includes three short-term price targets with a standard deviation of $4.16, where the lowest estimate of $18.00 suggests a 22% increase, and the highest estimate of $26.00 indicates a 76.3% surge [2] - Analysts show strong agreement on PRAA's ability to report better earnings, with a positive trend in earnings estimate revisions correlating with potential stock price increases [4][11] Group 2 - Over the last 30 days, the Zacks Consensus Estimate for PRAA's current year earnings has risen by 10.3%, with two estimates moving higher and no negative revisions [12] - PRAA holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates, indicating strong potential for upside [13] - While consensus price targets may not be entirely reliable, the direction they imply appears to be a good guide for potential price movement [14]

Group 1: Stock Recommendations - PRA Group, Inc. (PRAA) has a Zacks Rank 1 and a 9.9% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days, with a P/E ratio of 9.35 compared to 16.70 for the industry, and a Value Score of A [1] - Weatherford International plc (WFRD) also holds a Zacks Rank 1, with an 8.6% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days, a P/E ratio of 13.18 compared to 24.97 for the S&P 500, and a Value Score of A [2] - StoneCo Ltd. (STNE) carries a Zacks Rank 1, with a 12.8% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days, a P/E ratio of 11.33 compared to 23.30 for the industry, and a Value Score of B [3]