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Pra Group
(NASDAQ:PRAA)
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Rating:56Neutral
Price Target:
$21.00
▲(6.71% Upside)
Action:Reiterated
Date:10/08/26
The score is held back primarily by weak profitability and negative operating/free cash flow despite strong revenue momentum, while improved leverage and balance-sheet resilience support the outlook. Technicals are moderately positive with price above key moving averages and neutral-to-positive momentum. The latest earnings call adds support via record ERC, higher adjusted EBITDA, improving leverage, and cost actions, but near-term headwinds (rising legal costs and significant investment needed to sustain ERC) temper conviction; valuation is also less supportive given the negative P/E and no dividend yield data.
Positive Factors
Growing Portfolio Economics
Record estimated remaining collections and the European portfolio uplift expand the pool of receivables that can generate future income. This supports revenue visibility over several quarters and indicates that portfolio analytics and servicing are improving the company’s long-term recovery potential.
Negative Factors
Persistent Unprofitability
Strong top-line growth has not yet translated into durable profitability, and repeated loss periods reduce confidence in the quality and stability of earnings. Continued negative margins could constrain internal capital generation and make future performance more dependent on operating improvements and portfolio outcomes.
Read all positive and negative factors
Positive Factors
Negative Factors
Growing Portfolio Economics
Record estimated remaining collections and the European portfolio uplift expand the pool of receivables that can generate future income. This supports revenue visibility over several quarters and indicates that portfolio analytics and servicing are improving the company’s long-term recovery potential.
Read all positive factors
Pra Group (PRAA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$752.58M
Dividend YieldN/A
Average Volume (3M)425.34K
Price to Earnings (P/E)―
Beta (1Y)0.92
Revenue Growth12.25%
EPS Growth-388.78%
CountryUS
Employees2,417
SectorFinancial
Sector Strength70
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)-6.71
Shares Outstanding37,648,006
10 Day Avg. Volume437,920
30 Day Avg. Volume425,339
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 Cap6.05
Enterprise Value/Revenue3.34
Enterprise Value/Gross Profit3.11
Enterprise Value/Ebitda28.84
Forecast
1Y Price Target
$26.00Price Target Upside32.11% 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 receivables at a discount to their face value and then collecting more than the purchase price (and related servicing costs) over time. Its key revenue model is therefore driven...
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 | 1.46B | 1.23B | 685.65M | 416.04M | 550.31M | 669.61M |
| EBITDA | 157.74M | 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
19.68
Price Trends
19.46
Positive
18.08
Positive
17.41
Positive
Market Momentum
0.16
Positive
53.25
Neutral
71.69
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 19.68 is below the 20-day moving average (MA) of 19.99, above the 50-day MA of 19.46, and above the 200-day MA of 17.41, indicating a neutral trend. The MACD of 0.16 indicates Positive momentum. The RSI at 53.25 is Neutral, neither overbought nor oversold. The STOCH value of 71.69 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 |
|---|---|---|---|---|---|---|---|
73 Outperform | $5.69B | 11.81 | 32.35% | ― | 2.58% | 32.02% | |
68 Neutral | $2.14B | 7.42 | 29.83% | ― | 28.84% | ― | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | $1.17B | 7.65 | 33.84% | 4.72% | 72.54% | 35.16% | |
59 Neutral | $199.99M | 9.22 | 6.91% | ― | 11.35% | 9.36% | |
56 Neutral | $752.58M | -2.98 | -26.80% | ― | 12.25% | -388.78% | |
51 Neutral | $868.44M | -18.90 | -2.04% | 6.91% | -17.19% | -244.62% |
* Financial Sector Average
PRAA
Pra Group
19.99
5.68
39.69%
CPSS
Consumer Portfolio Services
9.13
1.68
22.55%
CACC
Credit Acceptance
548.12
43.87
8.70%
ECPG
Encore Capital
100.85
55.94
124.56%
NAVI
Navient
9.26
-2.37
-20.39%
JCAP
Jefferson Capital, Inc.
20.35
3.22
18.80%
Pra Group Corporate Events
Business Operations and StrategyPrivate Placements and Financing
PRA Group Issues $400 Million Senior Notes Offering
Positive
Oct 8, 2026
On October 2, 2026, PRA Group, Inc. completed a private offering of $400 million in 8.500% senior unsecured notes due 2033, guaranteed by certain domestic restricted subsidiaries that also back its North American Credit Agreement. The notes, which...
Business Operations and StrategyPrivate Placements and Financing
PRA Group Prices $400 Million Senior Notes Offering
Neutral
Sep 29, 2026
On September 29, 2026, PRA Group, Inc., a global purchaser and collector of nonperforming loans, announced it had priced an offering of $400 million aggregate principal amount of 8.500% senior notes due 2033 in a private transaction exempt from U....
Business Operations and StrategyExecutive/Board Changes
PRA Group Europe president announces planned retirement transition
Neutral
Sep 23, 2026
PRA Group, Inc. announced that Owen James, President of PRA Group Europe, informed the company on September 21, 2026, of his intention to retire from his role effective December 31, 2026. He will continue in an advisory capacity until March 31, 20...
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...
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.