PRA (US:PRAA) ZACKSยท2025-01-23 18:26Core Insights - PRA Group, Inc. (PRAA) is experiencing growth due to rising portfolio income, improved cash collections, expanding U.S. portfolio supply, favorable pricing dynamics, and a strong cash position [1] Financial Performance - PRAA's stock has gained 10.6% over the past three months, outperforming the industry growth of 8.5% [2] - The Zacks Consensus Estimate for 2025 earnings is $2.01 per share, indicating a 17.5% growth from the 2024 estimate, with revenues projected at $1.2 billion, reflecting a 6.3% increase from 2024 [4] - The company has consistently outperformed earnings estimates in the last four quarters, with an average surprise of 305.32% [5] Revenue Growth Drivers - Revenue for the first nine months of 2024 increased by 41.3% year over year, driven by higher portfolio income from increased purchase volumes [6] - The stabilization of U.S. credit supply is expected to enhance portfolio availability and returns, allowing for further expansion in purchase volumes [7] - PRAA acquired nonperforming loan portfolios valued at $975.2 million, an 11.4% increase from the previous year [8] Cash Collection and Efficiency - Cash collections grew by 12% year over year in the first nine months of 2024, with management projecting 8-10% growth in 2025 [9] - The cash efficiency ratio is expected to exceed 60% in 2025, bolstered by modernized collection processes [9] - As of September 30, 2024, PRAA's cash and cash equivalents increased by 25.4% compared to the end of 2023 [9]