PROG Holdings (PRG) AI Stock Analysis

• Market Cap: $1.39B
• Dividend Yield: 1.45%
• Average Volume (3M): 414.56K
• Price to Earnings (P/E): 7.0
• Beta (1Y): 1.10
• Revenue Growth: 5.18%
• EPS Growth: 109.28%
• Country: US
• Employees: 1,403
• Sector: Industrials
• Sector Strength: 80
• Industry: Rental & Leasing Services
• EPS (TTM): 1.02
• Shares Outstanding: 39,543,750
• 10 Day Avg. Volume: 332,264
• 30 Day Avg. Volume: 414,562
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 0.62
• Enterprise Value/Gross Profit: 1.26
• Enterprise Value/Ebitda: 1.05
• 1Y Price Target: $36.00
• Price Target Upside: 2.16% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 80 Outperform
• Price Target: $38.00 ▲(7.83% Upside)

PROG Holdings' strong financial performance and undervaluation are the most significant factors driving the score. The company's robust cash flow and prudent leverage strategy provide a solid foundation for future growth. Technical indicators suggest moderate bullish momentum, while the recent earnings call and corporate events highlight both opportunities and challenges. The stock's undervaluation and dividend yield further enhance its attractiveness to investors.

Positive Factors

Earnings Performance

PRG reported 2Q EPS of $1.02, above analyst estimate of $0.83 and consensus of $0.80.

Fintech Growth

The growth in Progressive's 'Four' Buy Now Pay Later business was impressive and introduces a new fintech growth angle to PRG.

Revenue Generation

Higher-than-expected revenues in both lease revenues & fees and interest & fees on loans drove the earnings beat.

Negative Factors

Core Business Performance

The core leasing business is worse than previously anticipated and confirms the original thesis for downgrading PRG shares.

Guidance and Expectations

Management lowered 2025 guidance by a considerable amount, due to macro deterioration leading to lower-than-expected GMV and leased assets.

Market Competition

There is concern about increased competition in BNPL and broader point of sale finance, contributing to the downgrade of peer, pure-play BNPL player Affirm from Buy to Neutral.

PROG Holdings Business Overview & Revenue Model

Company Description

PROG Holdings, Inc. operates as an omnichannel provider of lease-purchase solutions to underserved and credit-challenged customers. It operates in two segments, Progressive Leasing and Vive. The Progressive Leasing segment offers lease-purchase solutions to customers for various merchandize in the furniture, appliances, electronics, jewelry, mobile phones and accessories, mattresses, and automobile electronics and accessories markets through point-of-sale and e-commerce retail partners, as well in-store, mobile, and online solutions. The Vive segment provides second-look and revolving credit products to customers that may not qualify for traditional prime lending through private label and Vive-branded credit cards. It offers lease-purchase solutions through approximately 24,000 third-party point-of-sale partner locations and e-commerce websites in 49 states and the District of Columbia. The company was formerly known as Aaron's Holdings Company, Inc. and changed its name to PROG Holdings, Inc. in December 2020. PROG Holdings, Inc. was founded in 1955 and is based in Draper, Utah.

How the Company Makes Money

PROG Holdings generates revenue through multiple key streams, primarily by offering point-of-sale financing solutions to consumers. The company earns interest from consumer loans and fees charged to retail partners for facilitating payment plans. Additionally, PROG Holdings benefits from partnerships with various retailers, which allows it to expand its customer base and enhance transaction volumes. The company also leverages technology to improve its services, driving customer acquisition and retention, which in turn contributes to its overall profitability.

PROG Holdings Financial Statement Overview

Summary

PROG Holdings demonstrates strong financial performance with significant revenue growth and improved profitability. The balance sheet reflects a prudent leverage strategy, while cash flow metrics indicate robust cash generation and management. The company is well-positioned for future growth, though there is potential to enhance operational efficiencies further.

Income Statement

PROG Holdings shows strong revenue growth in the TTM period with a 49.9% increase, indicating robust demand. The gross profit margin improved significantly to 49.5%, reflecting better cost management. Net profit margin also increased to 8.5%, showcasing enhanced profitability. However, the EBIT margin is relatively moderate at 9.3%, suggesting room for operational efficiency improvements.

Balance Sheet

The company maintains a stable debt-to-equity ratio of 0.90, indicating a balanced approach to leveraging. Return on equity is strong at 32.98%, demonstrating effective use of equity capital. However, the equity ratio is not explicitly calculated, which could provide further insights into financial stability.

Cash Flow

Operating cash flow to net income ratio is healthy at 1.77, indicating strong cash generation relative to earnings. Free cash flow growth is positive at 7.07%, showing improved cash management. The free cash flow to net income ratio is high at 0.96, reflecting efficient conversion of earnings into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.52B	2.46B	2.41B	2.60B	2.68B	2.48B
Gross Profit	1.25B	815.42M	831.96M	807.92M	823.68M	699.86M
EBITDA	1.49B	1.85B	1.83B	1.98B	2.19B	2.06B
Net Income	214.71M	197.25M	138.84M	98.71M	243.56M	-61.47M
Balance Sheet
Total Assets	1.45B	1.51B	1.49B	1.49B	1.62B	1.32B
Cash, Cash Equivalents and Short-Term Investments	222.03M	95.66M	155.42M	131.88M	170.16M	36.65M
Total Debt	603.38M	655.06M	608.11M	612.09M	615.06M	79.52M
Total Liabilities	785.92M	863.49M	899.92M	921.45M	942.35M	331.27M
Stockholders Equity	668.67M	650.28M	591.33M	570.46M	679.41M	986.14M
Cash Flow
Free Cash Flow	219.00M	130.21M	194.62M	232.81M	236.41M	391.62M
Operating Cash Flow	227.22M	138.53M	204.24M	242.48M	245.96M	455.96M
Investing Cash Flow	-96.14M	-79.17M	-38.83M	-53.53M	-82.17M	-114.53M
Financing Cash Flow	-159.19M	-119.12M	-141.87M	-227.22M	-30.28M	-362.55M

PROG Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 35.24
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRG, the sentiment is Positive. The current price of 35.24 is above the 20-day moving average (MA) of 33.40, above the 50-day MA of 31.41, and above the 200-day MA of 33.71, indicating a bullish trend. The MACD of 1.12 indicates Negative momentum. The RSI at 66.92 is Neutral, neither overbought nor oversold. The STOCH value of 89.82 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PRG.

PROG Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PRG	80 Outperform	$1.39B	6.95	34.34%	1.45%	5.18%	109.28%
WLFC	69 Neutral	$1.01B	8.84	19.97%	0.67%	30.08%	32.62%
CTOS	67 Neutral	$1.39B	―	-4.37%	―	6.21%	-177.57%
Sector *	64 Neutral	$10.74B	15.62	8.16%	2.00%	2.79%	-14.82%
MPU	55 Neutral	$138.80M	―		―	―	―
ALTG	50 Neutral	$267.28M	―	-77.23%	2.73%	-3.46%	-222.37%
FPAY	42 Neutral	$14.80M	―	-4.33%	―	19.51%	29.43%

PROG Holdings Corporate Events

PROG Holdings Declares Quarterly Cash Dividend

On August 6, 2025, PROG Holdings‘ Board of Directors declared a quarterly cash dividend of $0.13 per share of common stock, payable on September 4, 2025, to shareholders recorded by August 19, 2025. This announcement reflects the company’s ongoing commitment to providing value to its shareholders and may positively influence its market positioning by demonstrating financial stability and shareholder confidence.