Why Is PRA Group (PRAA) Up 27.1% Since Last Earnings Report?

Core Viewpoint - PRA Group has shown a significant increase in share price, outperforming the S&P 500, following its recent earnings report which highlighted strong cash collections and revenue growth [1]. Financial Performance - PRA Group reported Q3 2025 earnings per share (EPS) of 53 cents, exceeding the Zacks Consensus Estimate by 6%, and an increase from 49 cents per share a year ago [2]. - Total revenues for the quarter rose by 10.5% year over year to $311.1 million, surpassing the consensus mark by 4.7% [2]. - Cash collections reached $542.2 million, a 13.7% increase year over year, and also beat the Zacks Consensus Estimate of $531 million [4]. - Portfolio income increased by 19.6% year over year to $258.5 million, although it fell short of the consensus estimate of $261 million [5]. - Total operating expenses surged to $626.7 million from $191.5 million a year ago, primarily due to rising legal collection costs and other operational expenses [5]. Operational Insights - The company recorded a net loss of $404 million compared to a net income of $28.9 million in the prior-year quarter [6]. - PRA Group's adjusted cash efficiency ratio improved by 500 basis points year over year to 60.6% [6]. - Estimated remaining collections at the end of Q3 amounted to $8.4 billion, reflecting a 15.2% year-over-year increase [6]. Financial 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 [7]. - Total assets increased to $5 billion from $4.9 billion at the end of 2024 [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]. - Estimates for the stock have trended upward, with a consensus estimate shift of 11.03% in the past month [10]. Industry Context - PRA Group operates within the Zacks Financial - Miscellaneous Services industry, where another player, Lazard, reported a revenue increase of 12.2% year over year [13]. - Lazard's EPS for the last quarter was $0.56, up from $0.38 a year ago, and it is expected to post earnings of $0.87 per share for the current quarter, indicating an 11.5% change from the previous year [14].