Pra Group (PRAA) AI Stock Analysis

• Market Cap: $708.80M
• Dividend Yield: N/A
• Average Volume (3M): 375.47K
• Price to Earnings (P/E): 9.1
• Beta (1Y): 1.55
• Revenue Growth: 39.47%
• EPS Growth: N/A
• Country: US
• Employees: 3,115
• Sector: Financial
• Sector Strength: 79
• Industry: Financial - Credit Services
• EPS (TTM): 1.78
• Shares Outstanding: 39,509,560
• 10 Day Avg. Volume: 345,900
• 30 Day Avg. Volume: 375,470
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.72
• Price to Cash Flow (P/CF): 4.70
• P/FCF Ratio: 4.70
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $34.00
• Price Target Upside: 88.37% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Pra Group's stock score reflects a mix of strengths and challenges. The company shows robust revenue growth and strategic initiatives boosting future prospects, as highlighted in a positive earnings call. However, significant financial risk due to high leverage and liquidity constraints, coupled with bearish technical indicators, weigh heavily on the stock's performance. The valuation suggests potential undervaluation, but the absence of dividends limits its appeal to income-focused investors.

Positive Factors

Earnings Performance

PRA Group delivered another quarter of EPS and purchasing volume upside and refined the 2025 guidance metrics that raised purchasing and earnings outlook.

Leadership Transition

The CEO transition follows a successful operational turnaround, indicating strong leadership and strategic direction.

Market Position

The company remains well-positioned relative to the broader consumer finance landscape based on a sweet spot in the purchasing and collections cycle characterized by elevated supply of charge-offs and excess funding.

Negative Factors

Industry Challenges

PRAA shares have suffered from the onslaught of negative news flow related to the problems at Intrum, Europe’s largest debt collector, which filed for bankruptcy protection.

Operational Costs

The only negative variance relative to our previous forecast was a modestly lower Cash Efficiency ratio, and the stepped-up investments in up-front legal costs will continue at a greater pace than forecast.

Stock Performance

PRAA shares have notably under-performed both consumer finance peers and the S&P 500 with the stock down approximately 13% YTD and down approximately 25% from its 52-week peak despite delivering outstanding results and guidance upside.

Pra Group Business Overview & Revenue Model

Company Description

PRA Group, Inc. (PRAA) is a global leader in acquiring and collecting nonperforming loans. The company operates in the financial services sector, focusing on purchasing portfolios of defaulted consumer debt from major banks, credit unions, and other financial institutions. PRA Group specializes in debt recovery solutions, leveraging its expertise in analytics, compliance, and operations to provide efficient and ethical recovery services across the Americas and Europe.

How the Company Makes Money

PRA Group makes money primarily by purchasing nonperforming loans at a discount from their face value and then collecting on these debts. The company employs sophisticated data analytics and a team of skilled professionals to recover the outstanding amounts, either directly or through payment plans with debtors. This process involves negotiating settlements with debtors or taking legal action when necessary. Their revenue model is largely driven by the difference between the purchase price of the debt and the amount they successfully collect. Additionally, PRA Group may engage in partnerships with financial institutions to provide debt recovery services, further contributing to their revenue. The company's earnings are influenced by factors such as the economic environment, regulatory changes, and the effectiveness of their collection strategies.

Pra Group Financial Statement Overview

Summary

Pra Group exhibits strong revenue growth and gross profit margins, but profitability is hindered by high expenses and leverage. The balance sheet shows significant debt levels, raising concerns about financial stability. Cash flow challenges further point to liquidity constraints. Overall, while there are growth opportunities, the company must address profitability and cash management to enhance financial health.

Income Statement

The company shows a strong gross profit margin of 70.7% for TTM, indicating efficient cost management. However, the net profit margin is relatively low at 6.3%, suggesting potential challenges in controlling operating and other expenses. The revenue growth rate for TTM is significant at 37.9%, reflecting robust top-line expansion. Nevertheless, the net income has been volatile, with a shift from a loss in 2023 to a profit in the TTM period.

Balance Sheet

The debt-to-equity ratio is high at 2.96 for TTM, indicating substantial leverage, which could pose financial risk. The return on equity is modest at 6.2%, reflecting challenges in generating profits from equity investment. The equity ratio stands at 23.0%, suggesting a moderate reliance on equity financing compared to total assets.

Cash Flow

The company faces challenges with negative free cash flow for TTM, indicating potential liquidity issues. The operating cash flow to net income ratio is negative, highlighting difficulties in converting profits into cash. The free cash flow to net income ratio is also negative, suggesting that cash outflows exceed inflows from operations.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
1.12B	815.50M	968.75M	1.10B	1.07B	995.30M
	Gross Profit
795.28M	504.66M	612.11M	718.08M	628.55M	684.86M
	EBIT
346.11M	100.49M	285.80M	375.00M	349.70M	247.69M
	EBITDA
312.70M	133.54M	301.05M	390.25M	368.17M	265.15M
	Net Income Common Stockholders
70.60M	-83.48M	117.15M	183.16M	149.34M	86.16M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
23.01M	172.00M	83.38M	87.58M	108.61M	119.77M
	Total Assets
882.45M	4.53B	4.18B	4.37B	4.45B	4.42B
	Total Debt
297.63M	3.08B	2.55B	2.67B	2.72B	2.88B
	Net Debt
274.63M	2.97B	2.47B	2.58B	2.61B	2.76B
	Total Liabilities
444.32M	3.29B	2.89B	3.04B	3.08B	3.20B
	Stockholders Equity
422.80M	1.17B	1.23B	1.29B	1.34B	1.17B
Cash Flow		Free Cash Flow
-98.64M	-100.42M	8.34M	73.71M	124.47M	115.36M
	Operating Cash Flow
-94.59M	-97.53M	21.59M	84.92M	141.70M	133.39M
	Investing Cash Flow
-382.47M	-234.86M	120.45M	160.38M	115.00M	-441.19M
	Financing Cash Flow
490.84M	355.30M	-121.34M	-262.81M	-252.10M	339.52M

Pra Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 18.05
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRAA, the sentiment is Negative. The current price of 18.05 is below the 20-day moving average (MA) of 19.92, below the 50-day MA of 21.04, and below the 200-day MA of 21.48, indicating a bearish trend. The MACD of -0.04 indicates Negative momentum. The RSI at 57.34 is Neutral, neither overbought nor oversold. The STOCH value of 73.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PRAA.

Pra Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JPM	80 Outperform	$655.24B	11.86	17.28%	2.21%	17.07%	21.78%
COF	71 Outperform	$66.98B	15.09	7.86%	1.57%	9.06%	-3.02%
ALLY	69 Neutral	$9.63B	17.42	6.63%	3.92%	3.41%	-12.41%
Sector *	64 Neutral	$13.44B	9.41	9.19%	4.92%	16.30%	-8.66%
PRAA	61 Neutral	$708.80M	9.10	6.13%	―	39.47%	―
NAVI	55 Neutral	$1.23B	10.17	4.85%	5.95%	-14.40%	-34.34%
ECPG	49 Neutral	$750.54M	―	-16.34%	―	6.78%	33.06%

Pra Group Corporate Events

PRA Group Announces New CEO Appointment

On April 2, 2025, PRA Group announced the retirement of Vikram A. Atal as President and CEO, effective June 17, 2025, following the company’s annual meeting. Martin Sjolund, who has been leading PRA Group Europe, will succeed Atal as President and CEO. This leadership transition is part of the company’s succession planning to ensure long-term, profitable growth. Atal will remain as a senior advisor until the end of 2025, and Glenn P. Marino will also retire from the Board following the annual meeting. Sjolund’s appointment is expected to further strengthen PRA Group’s global leadership position and create value for shareholders.

Spark’s Take on PRAA Stock

According to Spark, TipRanks’ AI Analyst, PRAA is a Neutral.

PRA Group’s stock score reflects a mix of strengths and challenges. The company shows robust revenue growth and strategic initiatives boosting future prospects, as highlighted in a positive earnings call. However, significant financial risk due to high leverage and liquidity constraints, coupled with bearish technical indicators, weigh heavily on the stock’s performance. The valuation suggests potential undervaluation, but the absence of dividends limits its appeal to income-focused investors.

To see Spark’s full report on PRAA stock, click here.

PRA Group Reports Strong 2024 Financial Results

On February 19, 2025, PRA Group announced its financial results for Q4 and full year 2024, highlighting a transformative year with significant improvements. The company reported a net income attributable to PRA Group of $70.6 million for 2024, alongside record portfolio purchases of $1.4 billion and cash collections of $1.9 billion, marking a 13% growth. These achievements reflect the company’s strategic actions and effective execution, positioning it for continued profitable growth and shareholder value enhancement.