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Pra Group
(NASDAQ:PRAA)
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Rating:62Neutral
Price Target:
$21.00
▲(23.67% Upside)
Action:Reiterated
Date:08/08/26
PRAA scores as moderately attractive: a strengthened balance sheet and a positive earnings call (record ERC, improving EBITDA, better leverage and liquidity) support the outlook, and technicals show a bullish price trend. Offsetting these are weak current financial quality driven by ongoing losses and negative free cash flow, and valuation is hampered by a negative P/E.
Positive Factors
De-risked Balance Sheet
Material balance-sheet repair and ample available capital lower refinancing and liquidity risk over the medium term. Improved leverage and a multi-year debt maturity profile support disciplined portfolio purchases, opportunistic buybacks, and investments in operations without immediate funding pressure.
Negative Factors
Weak Cash Generation
Persistent negative operating and free cash flow constrains the company’s ability to internally fund portfolio purchases, legal investments, and returns to shareholders. Until cash generation consistently turns positive, PRA may need external capital or to limit growth and buybacks, reducing strategic flexibility.
Read all positive and negative factors
Positive Factors
Negative Factors
De-risked Balance Sheet
Material balance-sheet repair and ample available capital lower refinancing and liquidity risk over the medium term. Improved leverage and a multi-year debt maturity profile support disciplined portfolio purchases, opportunistic buybacks, and investments in operations without immediate funding pressure.
Read all positive factors
Pra Group (PRAA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$662.51M
Dividend YieldN/A
Average Volume (3M)603.73K
Price to Earnings (P/E)―
Beta (1Y)0.89
Revenue Growth12.38%
EPS Growth-498.81%
CountryUS
Employees2,615
SectorFinancial
Sector Strength70
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)-6.72
Shares Outstanding38,140,890
10 Day Avg. Volume378,367
30 Day Avg. Volume603,731
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)0.71
Price to Sales (P/S)0.56
P/FCF Ratio-7.67
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$26.00Price Target Upside53.12% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)2.52
Revenue Forecast (FY)$1.22B
Pra Group Business Overview & Revenue Model
Company Description
PRA Group, Inc., a financial and business services enterprise, specializes in the acquisition, management, and recovery of defaulted loan portfolios. Its operations span the Americas, Australia, and Europe. The company primarily procures overdue f...
How the Company Makes Money
PRA Group makes money primarily by buying portfolios of nonperforming consumer receivables at a discount to their face value and then collecting on those receivables over time. Revenue is recognized as the company generates cash collections from t...
Pra Group Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 09, 2026
Earnings Call Sentiment Positive
The call highlights solid operational and financial progress: record ERC, higher adjusted EBITDA (+10% LTM), growing cash collections (+4% YoY), improved leverage (2.67x), meaningful European portfolio upgrades (+$349M ERC) and continued technology/digital modernization. Management is executing cost reductions and progressing on AI and omnichannel capabilities while maintaining disciplined capital allocation and a refreshed $150M repurchase authorization. Offsetting items include higher operating expenses related to legal investments and one-time reorganization charges, rising legal and interest costs, higher U.S. purchase multiples, and a near-term ~$1B investment need to sustain ERC—though management expects legal cost growth to moderate and cost savings to compound. Overall, positive operational momentum and strengthened balance sheet outweigh the near-term expense and capital deployment headwinds.Positive Updates
Record ERC and ERC Increase
Ending ERC reached a record $8.9 billion, up 7% year-over-year; management completed a comprehensive European portfolio review that increased European ERC by $349 million, which management expects to translate to ~$260 million of additional portfolio income over the life of the cash curves (~$25 million average annualized near-term).
Negative Updates
Higher Operating Expenses and One-time Charges
Total operating expenses were $219 million for the quarter, up $16 million year-over-year. Increase included $15 million of investment in the legal channel and $5 million of one-time reorganization costs (approximately $2 million severance and $3 million site consolidation/asset impairment).
Read all updates
Q2-2026 Updates
Positive
Negative
Record ERC and ERC Increase
Ending ERC reached a record $8.9 billion, up 7% year-over-year; management completed a comprehensive European portfolio review that increased European ERC by $349 million, which management expects to translate to ~$260 million of additional portfolio income over the life of the cash curves (~$25 million average annualized near-term).
Read all positive updates
Company Guidance
Management's guidance and forward plan emphasize disciplined capital allocation and modest near-term expectations: full‑year 2026 effective tax rate ~30%, legal collection costs to continue rising but at a more moderate pace than the 40% y/y increase in 2024 and 30% in 2025, and management expects the €349M increase in European ERC (part of record ERC of $8.9B, +7% y/y; Europe 54% / U.S. 40%) to drive roughly $260M of additional portfolio income over the remaining life of those cash curves (~$25M of average annualized portfolio income near‑term). To maintain current ERC based on H1 purchase multiples would require roughly $1.0B of investment over the next 12 months (long‑term investment target remains $1.0–$1.3B), while capital priorities continue to be disciplined portfolio purchases, operating/digital/AI investments, and opportunistic buybacks (repurchases $10M in Q2, $40M in the last 12 months; new authorization up to $150M). Financial targets and liquidity remain strong: cash collections grew 4% y/y to $559M with cash efficiency at 61%, LTM adjusted EBITDA $1.4B (+10% y/y), net leverage down to 2.67x (targeting mid‑2x), total committed capital $3.1B with ~ $1.0B total availability ( ~$733M available vs. current ERC + $265M contingent), no debt maturities until Feb 2028, and ongoing cost actions expected to deliver roughly $20M of net annualized savings from the Q2 actions and roughly $35M in aggregate from the two waves since 2025.Pra Group Financial Statement Overview
Summary
Income Statement
34
Negative
Balance Sheet
78
Positive
Cash Flow
29
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.36B | 1.24B | 1.12B | 815.50M | 966.52M | 1.10B |
| Gross Profit | 1.44B | 1.23B | 685.65M | 416.04M | 550.31M | 669.61M |
| EBITDA | 24.71M | 18.99M | 209.13M | 10.49M | 170.37M | 266.11M |
| Net Income | -265.05M | -305.14M | 70.60M | -83.48M | 117.15M | 183.16M |
Balance Sheet | ||||||
| Total Assets | 5.24B | 5.10B | 4.93B | 4.53B | 4.18B | 4.37B |
| Cash, Cash Equivalents and Short-Term Investments | 132.43M | 104.41M | 161.70M | 172.00M | 150.19M | 87.58M |
| Total Debt | 30.68M | 32.16M | 3.36B | 4.40B | 3.61B | 3.84B |
| Total Liabilities | 4.13B | 4.06B | 3.74B | 3.29B | 2.89B | 3.04B |
| Stockholders Equity | 1.05B | 979.85M | 1.14B | 1.17B | 1.23B | 1.29B |
Cash Flow | ||||||
| Free Cash Flow | -37.85M | -90.36M | -98.64M | -100.42M | 8.34M | 73.71M |
| Operating Cash Flow | -31.39M | -85.54M | -94.59M | -97.53M | 21.59M | 84.92M |
| Investing Cash Flow | -53.82M | -55.72M | -382.47M | -234.86M | 120.45M | 160.38M |
| Financing Cash Flow | 60.95M | 111.75M | 490.84M | 355.30M | -121.34M | -262.81M |
Pra Group Technical Analysis
Positive
16.98
Price Trends
17.03
Positive
17.77
Positive
16.56
Positive
Market Momentum
0.23
Negative
65.91
Neutral
59.24
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRAA, the sentiment is Positive. The current price of 16.98 is below the 20-day moving average (MA) of 17.71, below the 50-day MA of 17.03, and above the 200-day MA of 16.56, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 65.91 is Neutral, neither overbought nor oversold. The STOCH value of 59.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PRAA.
Pra Group Risk Analysis
Pra Group disclosed 22 risk factors in its most recent earnings report. Pra Group reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Pra Group Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | $7.23B | 9.41 | 23.07% | 7.01% | 6.93% | 19.96% | |
62 Neutral | $662.51M | -2.43 | -26.80% | ― | 12.38% | -498.81% | |
59 Neutral | $13.18B | 10.10 | 9.42% | 2.80% | 1.97% | 174.08% | |
57 Neutral | $1.98B | 5.13 | 47.95% | 11.44% | -1.65% | -53.21% | |
55 Neutral | $2.63B | 53.79 | 6.59% | ― | 57.69% | ― |
* Financial Sector Average
PRAA
Pra Group
19.79
4.52
29.60%
WU
Western Union
7.08
-0.31
-4.17%
ALLY
Ally Financial
43.72
7.55
20.86%
OMF
OneMain Holdings
64.95
12.29
23.35%
UPST
Upstart Holdings
31.09
-32.37
-51.01%
Pra Group Corporate Events
Business Operations and StrategyStock BuybackFinancial Disclosures
PRA Group Announces New $150 Million Share Repurchase
Positive
Aug 6, 2026
On August 6, 2026, PRA Group reported second quarter 2026 results showing total cash collections of $559 million, up 4% year-on-year, net income of $58 million, diluted EPS of $1.51, and estimated remaining collections rising 7% to $8.9 billion, w...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
PRA Group Shareholders Approve Expanded Incentive Plan at Meeting
Positive
Jun 23, 2026
On June 16, 2026, PRA Group, Inc. held its 2026 Annual Meeting of Stockholders, where shareholders approved an amendment to the company’s 2022 Omnibus Incentive Plan to increase the share limit by 3,500,000 common shares, expanding the pool ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.