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PROG Holdings (PRG)
NYSE:PRG
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PROG Holdings
(NYSE:PRG)
75Outperform
Positive Factors
Earnings
PRG reported 1Q EPS of $0.90, surpassing both analyst estimates and consensus expectations.
Revenue Performance
The Four business continues to expand rapidly, with revenue nearing one-fifth of public peer Sezzle's.
Negative Factors
Guidance
Management significantly lowered 2025 guidance due to macroeconomic challenges affecting GMV and leased assets.
Sales Performance
Progressive Leasing GMV was approximately 4 percentage points below estimate, impacting leased assets negatively.
PROG Holdings (PRG) vs. S&P 500 (SPY)
Market Cap
$1.08B
Dividend Yield1.83%
Average Volume (3M)500.36K
Price to Earnings (P/E)5.5
Beta (1Y)1.04
Revenue Growth4.62%
EPS Growth101.14%
CountryUS
Employees1,403
SectorIndustrials
Sector Strength77
IndustryRental & Leasing Services
Share Statistics
EPS (TTM)0.90
Shares Outstanding40,354,010
10 Day Avg. Volume594,766
30 Day Avg. Volume500,357
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.39
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit1.84
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$36.60Price Target Upside36.47% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
PROG Holdings Business Overview & Revenue Model
Company DescriptionPROG Holdings, Inc. (PRG) is a financial technology holding company based in the United States. It primarily operates through its wholly-owned subsidiary, Progressive Leasing, which offers lease-purchase solutions to consumers. The company facilitates transactions between consumers who may not have access to traditional credit and retailers in various sectors, including furniture, appliances, electronics, and other durable goods.
How the Company Makes MoneyPROG Holdings generates revenue primarily through its lease-purchase agreements. The company partners with retailers to provide consumers with the option to lease merchandise over a specified term, usually 12 months, with the flexibility to purchase the item at any point during the lease period. Revenue is earned through initial lease fees, periodic rental payments made by consumers, and additional fees if the consumers choose to purchase the items. The business model relies heavily on partnerships with a wide range of retailers to expand its market reach and make its leasing services available to a larger consumer base. Additionally, PROG Holdings benefits from its proprietary technology platform that streamlines the lease approval and management process, contributing to operational efficiency and customer satisfaction.
PROG Holdings Financial Statement Overview
Summary
PROG Holdings maintains a strong financial position with effective cost management and operational efficiency. While profitability metrics are solid, revenue growth has shown variability, presenting a challenge. The balance sheet is robust, with a strong equity position and no debt, reducing financial risk. Cash flow management is stable but could be optimized for better free cash flow generation. Overall, the company's financial health is commendable, with opportunities for growth and 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.75
Positive
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.80
Positive
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.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.46B | 2.41B | 2.60B | 2.68B | 2.48B | Gross Profit |
| 815.42M | 831.96M | 807.92M | 823.68M | 607.58M | EBIT |
| 194.90M | 225.63M | 1.92B | 333.53M | 271.76M | EBITDA |
| 194.90M | 1.83B | 185.65M | 333.53M | 271.76M | Net Income Common Stockholders |
| 197.25M | 138.84M | 98.71M | 243.56M | 233.63M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 95.66M | 155.42M | 131.88M | 170.16M | 36.65M | Total Assets |
| 1.51B | 1.49B | 1.49B | 1.62B | 1.32B | Total Debt |
| 655.06M | 608.11M | 612.09M | 615.06M | 79.52M | Net Debt |
| 559.40M | 452.70M | 480.21M | 444.90M | 42.87M | Total Liabilities |
| 863.49M | 899.92M | 921.45M | 942.35M | 331.27M | Stockholders Equity |
| 650.28M | 591.33M | 570.46M | 679.41M | 986.14M |
| Cash Flow | Free Cash Flow | |||
| 130.21M | 194.62M | 232.81M | 236.41M | 391.62M | Operating Cash Flow |
| 138.53M | 204.24M | 242.48M | 245.96M | 455.96M | Investing Cash Flow |
| -79.17M | -38.83M | -53.53M | -82.17M | -114.53M | Financing Cash Flow |
| -119.12M | -141.87M | -227.22M | -30.28M | -362.55M |
PROG Holdings Technical Analysis
Neutral
26.82
Price Trends
26.60
Positive
33.92
Negative
39.73
Negative
Market Momentum
-0.12
Negative
51.60
Neutral
83.57
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRG, the sentiment is Neutral. The current price of 26.82 is above the 20-day moving average (MA) of 26.07, above the 50-day MA of 26.60, and below the 200-day MA of 39.73, indicating a neutral trend. The MACD of -0.12 indicates Negative momentum. The RSI at 51.60 is Neutral, neither overbought nor oversold. The STOCH value of 83.57 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PRG.
PROG Holdings Risk Analysis
PROG Holdings disclosed 47 risk factors in its most recent earnings report. PROG Holdings 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
PROG Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $963.16M | 21.66 | 12.06% | 1.99% | 0.92% | 21.96% | |
78 Outperform | $1.06B | 21.13 | 25.20% | 0.76% | 7.03% | 7.75% | |
75 Outperform | $1.08B | 5.53 | 33.88% | 1.83% | 4.62% | 101.14% | |
70 Outperform | $1.20B | 10.21 | 18.32% | 0.48% | 32.55% | 70.32% | |
68 Neutral | $847.35M | 10.29 | 17.74% | 2.53% | -3.95% | -14.56% | |
67 Neutral | $904.29M | 23.69 | 4.27% | 1.33% | -5.39% | 12.14% | |
64 Neutral | $4.25B | 11.69 | 5.23% | 249.83% | 4.04% | -9.46% |
* Industrials Sector Average
Performance Comparison
PRG
PROG Holdings
26.82
-8.09
-23.17%
APOG
Apogee
38.72
-26.08
-40.25%
BBSI
Barrett Business Services
40.77
9.56
30.63%
GRC
Gorman-Rupp Company
36.68
3.67
11.12%
HLIO
Helios Technologies
29.15
-22.07
-43.09%
WLFC
Willis Lease Finance
134.82
73.30
119.15%
PROG Holdings Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: 0.86%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive and negative elements. The company reported strong revenue growth, exceeded earnings expectations, and showed growth in its BNPL platform. However, challenges such as a decline in GMV, the impact of a major retail partner's bankruptcy, and a challenging macro environment indicate significant headwinds.Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Consolidated revenue for Q1 2025 was $684.1 million, representing a 6.6% increase year over year.
Exceeded Earnings Expectations
Adjusted EBITDA was $70.3 million, and non-GAAP EPS was $0.90, both exceeding the high end of the company's outlook.
Growth in BNPL Platform
Four Technologies reported triple-digit GMV growth for the sixth consecutive quarter and achieved its first quarter of positive adjusted EBITDA.
Healthy Lease Portfolio
Lease portfolio balance was up 6.1% year over year, and Q1 write-offs were at 7.4%, within the company's targeted annual range of 6% to 8%.
Increase in Active Door Count
The active door count expanded by nearly 5% year over year, excluding the impact of Big Lots.
Negative Updates
Decline in GMV
Progressive Leasing's GMV for the quarter was down 4% compared to the same period last year, impacted by the bankruptcy of a large retail partner and a challenging retail environment.
Challenging Macro Environment
Ongoing economic volatility, evolving trade policy, and inflation are creating additional pressure on both direct-to-consumer and retail partner channels.
Impact of Retail Partner Bankruptcy
The bankruptcy of a large retail partner resulted in a mid-thirty million dollar GMV headwind in Q1 alone.
Continued Economic Uncertainty
The company revised its full-year 2025 outlook due to increased macro uncertainty and a decline in consumer confidence.
Company Guidance
During the PROG Holdings First Quarter 2025 Earnings Conference Call, the company provided guidance indicating a revised full-year revenue outlook in the range of $2.425 to $2.5 billion, adjusted EBITDA between $245 to $265 million, and non-GAAP EPS from $2.90 to $3.30. Despite macroeconomic challenges, the first quarter saw consolidated revenue increase by 6.6% year-over-year to $684.1 million, driven by a larger lease portfolio and higher ninety-day purchase activity. Adjusted EBITDA was reported at $70.3 million, with non-GAAP EPS at $0.90, both exceeding expectations. The lease portfolio balance was up 6.1% year-over-year as of December 31, 2024, reflecting a healthy performance with write-offs at 7.4%, within the targeted 6% to 8% annual range. The company highlighted strong growth at Four Technologies, its BNPL platform, which achieved its first quarter of positive adjusted EBITDA, and emphasized continued strategic investments in marketing and technology to support long-term growth.PROG Holdings Corporate Events
Executive/Board ChangesShareholder MeetingsDividends
PROG Holdings Declares Quarterly Cash Dividend
Positive
May 8, 2025
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.
Spark’s Take on PRG Stock
According to Spark, TipRanks’ AI Analyst, PRG is a Outperform.
PROG Holdings shows a balanced performance with a strong financial position and attractive valuation, offering a compelling case for value investors. However, technical indicators are mixed, reflecting market uncertainty, and recent earnings call highlights both opportunities and challenges, including a favorable revenue outlook and macroeconomic headwinds. These factors collectively result in a solid but cautious score.
To see Spark’s full report on PRG stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.