Valuation Metrics In terms of its value breakdown, the stock currently trades at 13.2X current fiscal year EPS estimates, which is a premium to the peer industry average of 10.4X. On a trailing cash flow basis, the stock currently trades at 1.1X versus its peer group's average of 7.2X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective. What's Driving the Outperformance? On this front, we can look at the Zacks Style Scores, as they provide investors with ...

Financial Data and Key Metrics Changes - The company reported consolidated revenue of $592.2 million for Q2 2024, exceeding the high end of the outlook by $17.2 million, and a year-over-year increase from $492.8 million in Q2 2023 [27][68] - Non-GAAP diluted EPS was $0.92, beating expectations by $0.17, supported by a reduced share count from the share repurchase program [17][56] - Adjusted EBITDA reached $72.3 million, resulting in a 12.2% margin, compared to $75 million and 12.7% in the same period last year [40][27] Business Line Data and Key Metrics Changes - The progressive leasing segment's GMV increased by 7.9% year-over-year, surpassing initial projections of low single-digit growth [64] - Revenue for the progressive leasing segment declined 0.8% from $574.8 million in Q2 2023 to $570.5 million, primarily due to a 4.7% decrease in gross lease asset balance [65] - The write-off rate for the progressive leasing segment was 7.7%, consistent with pre-pandemic levels, and is expected to be the peak for 2024 [10][38] Market Data and Key Metrics Changes - The company experienced GMV growth in both regional and national markets, with a year-over-year increase in the number of active doors and GMV per door in the regional market [11] - The GLA balance at the end of Q2 2024 was down 0.7% compared to the same period last year, showing improvement from previous quarters [36] Company Strategy and Development Direction - The company is focused on enhancing customer and retailer experiences, deepening integrations with partners, and expanding affiliate relationships through the PROG marketplace [6][28] - Strategic pillars include Grow, Enhance, and Expand, which are aimed at driving GMV performance and market share [28][42] - The company plans to continue funding growth, pursue strategic M&A opportunities, and return excess cash to shareholders through dividends and share repurchases [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving low single-digit GMV growth for the progressive leasing segment despite ongoing macroeconomic challenges [26] - The company expects Q3 GMV to grow in the high single digits and anticipates write-offs to remain within the targeted annual range of 6% to 8% [33][72] - Management highlighted the positive impact of credit tightening on the business and the expectation that these conditions will persist [93] Other Important Information - The company completed two custom e-commerce integrations in the first half of 2024 and has a robust pipeline for additional integrations [30] - The PROG marketplace has delivered over 250% growth year-to-date through June 30, 2024 [57] Q&A Session Summary Question: Growth drivers in the business - Management noted that GMV performance was strong and consistent, with improvements in existing retail partnerships contributing to productivity [48] Question: Retail landscape and bankruptcy risks - Management acknowledged the dynamic retail environment and emphasized direct communication with customers to navigate changes effectively [50] Question: Credit tightening sustainability - Management confirmed that while credit conditions are expected to remain tight, the impact on the business is viewed positively [93] Question: PROG Marketplace growth and integration - Management highlighted successful conversions from PROG Marketplace relationships to direct integrations, driven by increased volume [81] Question: Write-offs and gross margin pressure - Management explained that Q2 typically sees higher write-offs, and the trend of increased 90-day purchases may impact gross margins in Q3 [97]

Core Insights - PROG Holdings (PRG) reported quarterly earnings of $0.92 per share, exceeding the Zacks Consensus Estimate of $0.71 per share, with an earnings surprise of 29.58% [1] - The company posted revenues of $592.16 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 3.57% [2] - PROG Holdings has consistently surpassed consensus EPS estimates over the last four quarters [2] Financial Performance - The earnings for the same quarter last year were also $0.92 per share, indicating no year-over-year growth in earnings [1] - The revenues for the same quarter last year were $592.85 million, showing a slight decline in revenue year-over-year [2] - The current consensus EPS estimate for the upcoming quarter is $0.62, with expected revenues of $552.52 million, and for the current fiscal year, the EPS estimate is $2.98 on revenues of $2.35 billion [7] Market Position - PROG Holdings shares have increased by approximately 12% since the beginning of the year, while the S&P 500 has gained 16.5% [3] - The company currently holds a Zacks Rank 4 (Sell), indicating expectations of underperformance in the near future [6] - The Financial - Consumer Loans industry, to which PROG Holdings belongs, is ranked in the top 37% of over 250 Zacks industries, suggesting a relatively strong industry position [8] Future Outlook - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The trend of estimate revisions for PROG Holdings has been unfavorable leading up to the earnings release, which may impact future performance [6] - Another company in the same industry, Encore Capital Group, is expected to report earnings soon, with a projected EPS of $1.26, indicating a year-over-year increase of 16.7% [9]

Revenue and GMV Performance - The company reported revenues of $592.2 million for Q2 2024, relatively flat compared to $592.8 million in Q2 2023[124]. - Progressive Leasing's Gross Merchandise Volume (GMV) increased by $33.3 million to $454.5 million, a 7.9% increase year-over-year[125]. - Vive's GMV decreased by $4.1 million to $35.8 million, a decline of 10.3% compared to the same period in 2023[125]. - Total GMV for the company increased by $70.7 million to $546.4 million, representing a 14.9% increase year-over-year[125]. - Total revenues for the three months ended June 30, 2024, were $592,161, a decrease of 0.1% from $592,846 in the same period of 2023[136]. - Lease revenues and fees for the second quarter of 2024 were $570,516, down 0.6% from $574,839 in the prior year[136]. - Total revenues for the six months ended June 30, 2024, were $1,234,031,000, a slight decrease from $1,247,986,000 in the same period of 2023[146]. - Lease revenues and fees for Progressive Leasing were $1,191,066,000, down from $1,211,921,000 year-over-year[146]. Customer Metrics - The active customer count for Progressive Leasing was 834, slightly down from 843 in the previous year[127]. - The active customer count for Vive decreased to 85 from 90 year-over-year[127]. Earnings and Expenses - Earnings before income taxes decreased to $48.3 million, down from $52.0 million in Q2 2023, a decline of 7.1%[130]. - Operating expenses for the three months ended June 30, 2024, were $107,901, a slight increase of 0.2% from $107,710 in the same period of 2023[138]. - Earnings before income tax expense for the three months ended June 30, 2024, were $48,339, a decrease of 7.1% from $52,014 in the same period of 2023[142]. - Net interest expense for the three months ended June 30, 2024, was $7,339, an increase of 0.8% from $7,283 in the same period of 2023[141]. - Operating expenses increased by 10.5% to $235,242,000 compared to $212,969,000 in the prior year[147]. Tax and Provisions - The effective income tax rate for the three months ended June 30, 2024, was 30.1%, compared to 28.4% in the same period of 2023[143]. - The provision for lease merchandise write-offs increased to 7.7% of lease revenues in Q2 2024, up from 7.1% in Q2 2023[139]. - The provision for loan losses increased by 36.9% to $12,035 in Q2 2024, compared to $8,791 in Q2 2023[138]. - The provision for loan losses rose by 31.9% to $23,084,000, driven by growth in other strategic operations[147]. - The effective tax rate increased to 30.2% for the six months ended June 30, 2024, compared to 28.7% in the same period of 2023[150]. Cash Flow and Investments - Cash provided by operating activities decreased to $191,100,000 from $205,400,000 year-over-year[154]. - Cash used in investing activities increased to $17,800,000 from $10,600,000, primarily due to an $81,800,000 increase in cash investments in loans receivable[159]. - Cash used in financing activities was $78,600,000, compared to $73,800,000 in the same period last year, mainly for stock repurchases and dividends[160]. - The company repurchased 1,810,562 shares for $61,200,000 during the six months ended June 30, 2024[161]. Debt and Financial Compliance - The Company has a $350.0 million senior revolving credit facility with no outstanding balance as of June 30, 2024, and $350.0 million available for borrowings[163]. - As of June 30, 2024, the Company was in compliance with financial covenants requiring a total net debt to EBITDA ratio of no more than 2.50:1.00 and consolidated interest coverage of no less than 3.00:1.00[163]. - The Company issued $600 million in senior unsecured notes due 2029 at a fixed annual interest rate of 6.00%, with interest payable semi-annually[165]. - The Company had no outstanding borrowings under its Revolving Facility as of June 30, 2024, and a hypothetical 1.0% change in interest rates would not affect interest expense[170]. Internal Controls and Compliance - The Company’s disclosure controls and procedures were evaluated as effective as of the end of the reporting period[172]. - There were no changes in the Company's internal control over financial reporting that materially affected its operations during the three and six months ended June 30, 2024[173].

performance returning to pre-pandemic levels, and a smaller portfolio size during the quarter, partially offset by a decrease in Progressive Leasing's SG&A due to cost reduction actions executed in the first quarter of 2024, along with disciplined spending. 2024 Outlook PROG Holdings - Total Revenues PROG Holdings - Net Earnings PROG Holdings - Adjusted EBITDA PROG Holdings - Diluted EPS PROG Holdings - Diluted Non-GAAP EPS Statements in this news release regarding our business that are not historical facts ...

Core Viewpoint - Investing in bargain stocks with recent price momentum can be a safer approach, utilizing the Zacks Momentum Style Score to identify strong candidates [1] Group 1: Stock Performance and Valuation - PRG has a fast-paced momentum with a beta of 2.12, indicating it moves 112% higher than the market in either direction [2] - The stock has shown a four-week price change of 1.8%, reflecting growing investor interest [4] - PRG is trading at a Price-to-Sales ratio of 0.64, meaning investors pay only 64 cents for each dollar of sales, indicating a reasonable valuation [6] - Over the past 12 weeks, PRG gained 11.4%, demonstrating its ability to deliver positive returns over a longer time frame [11] Group 2: Momentum and Earnings Estimates - PRG has a Momentum Score of B, suggesting it is an opportune time to invest in the stock [5] - An upward trend in earnings estimate revisions has contributed to PRG earning a Zacks Rank 2 (Buy), which is associated with strong momentum effects [12] Group 3: Investment Strategy - Momentum investors typically focus on "buying high and selling higher," rather than waiting for cheap stocks to recover [9] - The 'Fast-Paced Momentum at a Bargain' screen identifies several stocks, including PRG, that are suitable for investment [7][10]

Company Overview - PROG Holdings (PRG) shares increased by 5.5% to $37.79 in the last trading session, with a notable trading volume, and have gained 7% over the past four weeks [1] - The company is a rent-to-own provider and is expected to report quarterly earnings of $0.71 per share, reflecting a year-over-year decline of 22.8%, with revenues projected at $571.55 million, down 3.6% from the previous year [3] Market Sentiment - The rise in consumer confidence in May, following three months of decline, has positively influenced investor sentiment towards PROG Holdings, despite ongoing concerns about inflation and interest rates [2] - The strong labor market has contributed to improved U.S. consumer sentiments, which may have driven the stock price higher [2] Earnings Estimates - The consensus EPS estimate for PROG Holdings has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [4] - The stock currently holds a Zacks Rank of 2 (Buy), suggesting a favorable outlook compared to other stocks in the same industry [4] Industry Comparison - PROG Holdings operates within the Zacks Financial - Consumer Loans industry, where another company, Enova International (ENVA), closed 1.2% higher at $61.65, with a return of -1.2% over the past month [4] - Enova International's consensus EPS estimate has remained unchanged at $2.08, representing a year-over-year increase of 20.9%, and it currently holds a Zacks Rank of 3 (Hold) [5]

Core Viewpoint - PROG Holdings (PRG) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Rising earnings estimates indicate an improvement in the company's underlying business, suggesting potential for stock price appreciation [5][8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7][9]. - Only the top 5% of Zacks-covered stocks receive a 'Strong Buy' rating, indicating superior earnings estimate revisions [9][11]. PROG Holdings Specifics - For the fiscal year ending December 2024, PROG Holdings is expected to earn $3 per share, reflecting a change of -18.3% from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for PROG Holdings has increased by 4% [8].

Momentum investing is essentially an exception to the idea of "buying low and selling high." Investors following this style of investing are usually not interested in betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time.Who doesn't like betting on fast-moving trending stocks? But determining the right entry point isn't easy. Often, these stocks lose momentum once their valuation moves ahead ...

Financial Data and Key Metrics Changes - Q1 2024 consolidated revenues declined 2% to $641.9 million compared to $655.1 million in the same quarter last year, driven by a smaller portfolio in the progressive leasing segment [23][68] - Consolidated adjusted EBITDA was $72.6 million, which was 11.3% of revenue, exceeding the high-end of the outlook, driven by GMV growth in the second half of the quarter [12][70] - Non-GAAP EPS for Q1 2024 came in at $0.91, exceeding the top-end of the outlook, primarily due to earnings beat and lower share count from the share repurchase program [70] Business Line Data and Key Metrics Changes - GMV for the progressive leasing segment ended flat year-over-year, exceeding expectations of a low single-digit decline [20][68] - Progressive leasing's SG&A expenses as a percentage of revenue increased slightly year-over-year to 12.3% in Q1 2024 from 11.9% in Q1 2023, driven by ongoing investments in sales, technology, and marketing [22] - The gross leased asset balance at the end of Q1 2024 was down 4.7% compared to the same period last year, an improvement from the 5.2% decline entering the period [68] Market Data and Key Metrics Changes - The company expects retail headwinds in the majority of its leasable categories to persist, but anticipates GMV growth in the low single digits for Q2 2024 [18][25] - The provision for leased merchandise write-offs was 7%, with expectations for full-year 2024 write-offs to remain within the targeted range of 6% to 8% [69] Company Strategy and Development Direction - The company is focused on strategic initiatives under the pillars of grow, enhance, and expand, aiming to onboard new retailers and improve customer experiences through technology investments [60][62] - Direct-to-consumer marketing efforts are being enhanced to drive incremental traffic and sales to retail partners, with significant growth anticipated from the Prague Marketplace [61][99] - The company remains disciplined on spending and is on track to deliver on full-year SG&A expectations [72] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about strategic direction and growth initiatives despite macroeconomic challenges, with expectations for GMV growth in Q2 2024 [11][18] - The outlook for 2024 assumes a difficult operating environment with soft demand for leasable consumer goods, but management remains focused on balancing profitability with GMV growth [27][66] - The company expects to generate meaningful cash flow from operations for the full year and continue returning excess cash to shareholders through dividends and share repurchases [19][72] Other Important Information - The company paid a quarterly cash dividend of $0.12 per share and repurchased approximately 781,000 shares during the quarter [19][24] - The revised consolidated outlook for 2024 calls for revenues in the range of $2.285 to $2.360 billion, adjusted EBITDA in the range of $240 to $255 million, and non-GAAP EPS in the range of $2.85 to $3.10 [74] Q&A Session Summary Question: What drove the GMV growth during the quarter? - Management noted that the GMV trend had some fluctuations, starting sluggishly in January but rebounding in the second half of February and March due to calendar dynamics [30][76] Question: How is the competitive landscape affecting the company? - Management described the market as bifurcated, with competition in both enterprise accounts and the SMB space, and expressed confidence in gaining market share [35][39] Question: What is the impact of the CFPB late fee proposal on the POS financing world? - Retail partners are having discussions with credit providers regarding potential changes, but the timing and extent of these changes remain uncertain [77] Question: Can you provide more details on the marketing strategies that were successful? - The company is focusing on joint marketing campaigns with retail partners and enhancing direct-to-consumer marketing to drive traffic and sales [99][100]