Why PRA Group Can Be a Smart Addition to Your Portfolio

PRA Group, Inc. PRAA is strategically positioned to grow in collecting debts. It expanded its services beyond debt collection, working for the government and giving audit services. Although PRAA has declined 4.9% in the past month, it shed less value than the industry average of an 11.5% fall.

PRA Group — with a market cap of $708.8 million — is a global finance and business service company based in Norfolk, VA. It acquires and collects non-performing loans and debt. The company has a growing network in the Americas, Europe and Australia.
Courtesy of solid prospects, PRA Group currently has a Zacks Rank #2 (Buy).

Where Do PRAA’s Estimates Stand?

The Zacks Consensus Estimate for PRA Group’s 2025 earnings is pegged at $2.26 per share, indicating a 26.3% year-over-year rise. In the past two months, it has witnessed three upward estimate revisions against none in the opposite direction. Furthermore, the consensus mark for revenues is pegged at $1.17 billion for 2025, implying a 5.2% year-over-year rise.

PRAA’s Growth Drivers

With the discipline globally capitalizing on the strong portfolio supply in the United States, the company has achieved a record portfolio purchase of $1.4 billion, rising 22% year over year in the fourth quarter of 2024. PRAA expects it to increase further in 2025.
To sustain long-term growth, the company strategically makes high-impact investments in the supply market to strengthen and expand seller relationships globally. It made $1.9 billion in cash collection in 2024, representing 13% year-over-year growth. 
PRA Group also demonstrated long-term value generation from distressed debt purchases as cash collection of 89% of the total in 2024 was generated from purchased portfolio before 2024. 

The cash efficiency ratio increased to 59% in 2024 compared to 58% in 2023. Total revenues were $293 million for the fourth quarter of 2024 and $1.1 billion for the full year, up 32% and 39%, respectively.

In the fourth quarter of 2024, net income attributable to PRAA was 47 cents, which beat the Zacks Consensus Estimate by 4.4%. It beat earnings estimates in each of the past four quarters, with the average surprise being 297.1%.

Better-Ranked Players

Some better-ranked stocks in the broader Finance space are Atlanticus Holdings Corporation ATLC, Oportun Financial Corporation OPRT and Acadian Asset Management Inc. AAMI, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Atlanticus’ current-year earnings is pegged at $6.17 per share, up from 29.4% a year ago. Atlanticus beat earnings estimates in each of the past four quarters, with an average surprise of 11.41%. The consensus mark for its current-year revenues is pegged at nearly $1.5 billion, which indicates a 10.8% year-over-year jump.

The Zacks Consensus Estimate for Oportun’s 2025 earnings implies 65.3% year-over-year growth. In the past two months, Oportun has witnessed four upward estimate revisions against none in the opposite direction. It beat earnings estimates in each of the past four quarters, with an average surprise of 209.3%.

The Zacks Consensus Estimate for Acadian’s current-year earnings suggests a 72-cent year-over-year improvement. In the past 60 days, Acadian has witnessed one upward estimate revision against none in the opposite direction. The consensus mark for the current-year revenues suggests a 4.8% year-over-year increase.

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This article originally published on Zacks Investment Research (zacks.com).

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