PROG Holdings (PRG) AI Stock Analysis

• Market Cap: $1.20B
• Dividend Yield: 1.75%
• Average Volume (3M): 428.94K
• Price to Earnings (P/E): 6.1
• Beta (1Y): 1.11
• Revenue Growth: 4.62%
• EPS Growth: 101.14%
• Country: US
• Employees: 1,403
• Sector: Industrials
• Sector Strength: 87
• Industry: Rental & Leasing Services
• EPS (TTM): 0.90
• Shares Outstanding: 40,354,010
• 10 Day Avg. Volume: 443,703
• 30 Day Avg. Volume: 428,938
• PEG Ratio: -0.18
• Price to Book (P/B): 1.54
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 3.77
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 0.14
• Enterprise Value/Gross Profit: 1.09
• Enterprise Value/Ebitda: 0.21
• 1Y Price Target: $36.60
• Price Target Upside: 23.48% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 78 Outperform
• Price Target: $33.00 ▲(11.34%Upside)

PROG Holdings demonstrates a solid financial foundation with effective cost management and no debt. The technical analysis shows moderate short-term strength, while the valuation indicates potential undervaluation. Despite some challenges noted in the earnings call, such as macroeconomic pressures and a major partner's bankruptcy, the company maintains growth prospects, especially in its BNPL platform. Corporate events further bolster confidence in its stability and governance.

Positive Factors

Earnings

PRG reported 1Q EPS of $0.90, which is higher than both the analyst's estimate and consensus.

Financial Performance

Higher-than-expected revenues were driven by better interest and fees on loans.

Negative Factors

Business Impact

Initial 2025 guidance is below estimate and consensus, reflecting the impact of Big Lots bankruptcy.

Guidance

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

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 makes money primarily through its lease-to-own business model, which involves entering into agreements with consumers who lease merchandise from partner retailers. The company generates revenue from the lease payments made by customers over the term of the lease agreement. These payments typically include an initial payment at the start of the lease followed by regular periodic payments. Additionally, PROG Holdings benefits from partnerships with a wide network of retailers, which helps expand its customer base and increase transaction volumes. The company also earns revenue from fees associated with leasing agreements, such as late fees or early purchase option fees, contributing to its overall earnings.

PROG Holdings Financial Statement Overview

Summary

PROG Holdings maintains a strong financial position with effective cost management and operational efficiency. The balance sheet is robust with no debt and a solid equity position, reducing financial risk. However, revenue growth variability presents a challenge, and cash flow management shows room for improvement.

Income Statement

The income statement shows a mixed performance with some strengths and weaknesses. The gross profit margin is strong at 56.5% for TTM, indicating efficient cost management. However, revenue growth has been inconsistent, with a decline in recent periods. The net profit margin is moderate at 11.5% for TTM, showing profitability but with room for improvement. The EBIT margin of 12.1% and EBITDA margin of 55.7% for TTM are healthy, reflecting operational efficiency.

Balance Sheet

The balance sheet presents a solid financial position with some notable strengths. The company has no debt in the TTM period, indicating strong financial stability and reduced risk. The equity ratio is a healthy 44.5%, suggesting a balanced capital structure. Return on equity is reasonable at 32.1% for TTM, showcasing effective utilization of equity. Overall, the balance sheet reflects financial prudence and stability.

Cash Flow

Cash flow analysis reveals moderate performance. Free cash flow growth is positive, though volatile. The operating cash flow to net income ratio of 1.01 indicates efficient cash conversion. However, the free cash flow to net income ratio is lower at 0.97, suggesting some challenges in translating profits into free cash flow. The cash flow position is stable but could benefit from improved consistency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.51B	2.46B	2.41B	2.60B	2.68B	2.48B
Gross Profit	1.25B	815.42M	831.96M	807.92M	823.68M	607.58M
EBITDA	1.49B	194.90M	1.83B	185.65M	333.53M	271.76M
Net Income	210.00M	197.25M	138.84M	98.71M	243.56M	233.63M
Balance Sheet
Total Assets	1.47B	1.51B	1.49B	1.49B	1.62B	1.32B
Cash, Cash Equivalents and Short-Term Investments	213.30M	95.66M	155.42M	131.88M	170.16M	36.65M
Total Debt	604.05M	655.06M	608.11M	612.09M	615.06M	79.52M
Total Liabilities	815.47M	863.49M	899.92M	921.45M	942.35M	331.27M
Stockholders Equity	654.45M	650.28M	591.33M	570.46M	679.41M	986.14M
Cash Flow
Free Cash Flow	204.54M	130.21M	194.62M	232.81M	236.41M	391.62M
Operating Cash Flow	212.72M	138.53M	204.24M	242.48M	245.96M	455.96M
Investing Cash Flow	-79.67M	-79.17M	-38.83M	-53.53M	-82.17M	-114.53M
Financing Cash Flow	-172.58M	-119.12M	-141.87M	-227.22M	-30.28M	-362.55M

PROG Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 29.64
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• 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 29.64 is above the 20-day moving average (MA) of 29.05, above the 50-day MA of 28.11, and below the 200-day MA of 37.10, indicating a neutral trend. The MACD of 0.18 indicates Positive momentum. The RSI at 56.48 is Neutral, neither overbought nor oversold. The STOCH value of 85.02 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	78 Outperform	$1.20B	6.06	33.88%	1.75%	4.62%	101.14%
WLFC	78 Outperform	$1.03B	10.20	18.32%	0.67%	32.55%	70.32%
BBSI	77 Outperform	$1.08B	21.45	25.86%	0.76%	8.41%	7.93%
APOG	70 Outperform	$905.86M	17.92	10.68%	2.48%	-0.77%	-52.02%
GRC	69 Neutral	$975.00M	21.93	12.06%	2.00%	0.92%	21.96%
HLIO	67 Neutral	$1.12B	30.12	4.27%	1.07%	-5.39%	12.14%
Sector *	65 Neutral	$10.56B	15.49	5.57%	1.96%	2.71%	-26.28%

PROG Holdings Corporate Events

PROG Holdings Declares Quarterly Cash Dividend

On May 7, 2025, PROG Holdings held its annual meeting of shareholders, where the election of directors and approval of executive compensation were key actions taken. Additionally, the company declared a quarterly cash dividend of $0.13 per share, payable on June 3, 2025, reflecting its commitment to shareholder returns.