Core Viewpoint - PRA Group (PRAA) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on the Zacks Consensus Estimate, which reflects EPS estimates from sell-side analysts for the current and following years [1][2]. - Changes in a company's future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements [4][6]. - Rising earnings estimates for PRA Group indicate an improvement in the company's underlying business, likely leading to increased stock prices [5][10]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7][9]. - Only the top 5% of Zacks-covered stocks receive a 'Strong Buy' rating, indicating superior earnings estimate revision features [9][10]. Specific Earnings Estimates for PRA Group - For the fiscal year ending December 2025, PRA Group is expected to earn $2.10 per share, reflecting a 17.3% change from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for PRA Group has increased by 4.6% [8].

Core Viewpoint - PRA Group (PRAA) shows potential for significant upside, with a mean price target of $30 indicating a 32.3% increase from the current price of $22.67 [1] Price Targets - The average price target for PRAA ranges from a low of $24 to a high of $35, with a standard deviation of $5.57, suggesting variability in analyst estimates [2] - The lowest estimate indicates a 5.9% increase, while the highest suggests a 54.4% upside [2] Analyst Sentiment - Analysts exhibit strong agreement on PRAA's earnings prospects, with positive revisions in earnings estimates indicating potential stock upside [4][9] - Over the last 30 days, two earnings estimates have increased, leading to a 4.6% rise in the Zacks Consensus Estimate [10] Zacks Rank - PRAA holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate factors, reinforcing its potential for near-term upside [11] Caution on Price Targets - While price targets are a common metric, they should be approached with skepticism as they may not reliably indicate actual stock price movements [5][8]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point, as stocks may lose momentum when their valuations exceed future growth potential [2] - Investing in bargain stocks that exhibit recent price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify potential opportunities [3] Group 2: PRA Group (PRAA) Analysis - PRAA has shown a four-week price change of 4.4%, indicating growing investor interest and recent price momentum [4] - Over the past 12 weeks, PRAA's stock has gained 5.6%, with a beta of 1.49, suggesting it moves 49% more than the market [5] - PRAA has a Momentum Score of A, indicating a favorable time to invest based on momentum [6] - The stock has received a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which typically attract more investors [7] - PRAA is trading at a Price-to-Sales ratio of 0.80, suggesting it is undervalued at 80 cents for each dollar of sales [7] Group 3: Additional Investment Opportunities - Besides PRAA, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - Zacks offers over 45 Premium Screens tailored to different investing styles, which can assist in identifying winning stock picks [9]

Core Insights - PRA Group, Inc. reported fourth-quarter 2024 earnings per share of 47 cents, exceeding the Zacks Consensus Estimate by 4.4% and recovering from a loss of 22 cents per share in the prior-year quarter [1][2] - Total revenues reached $293.2 million, marking a 32.4% year-over-year increase and surpassing the consensus mark by 6% [2][4] - The company experienced strong cash collections and rising portfolio income, contributing to a rebound in net income, which was recorded at $22.8 million compared to a loss of $5.9 million in the previous year [2][4] Financial Performance - Cash collections improved by 14.1% year over year to $468.1 million, although it fell short of the Zacks Consensus Estimate of $481.9 million [3] - Portfolio income rose 18% year over year to $229.7 million, exceeding the consensus mark of $228.4 million [3] - Total operating expenses increased by 13.2% year over year to $199.1 million, primarily due to higher legal collection costs and fees [4] Yearly Overview - For the full year 2024, total revenues amounted to $1.1 billion, a significant increase of 38.9% from 2023 [6] - Portfolio income for the year rose 13.2% year over year to $857.2 million, with earnings per share improving to $1.79 from a loss of $2.13 in 2023 [6] Future Outlook - Management anticipates portfolio investments of $1.2 billion for 2025, with cash collections expected to grow in the high-single digits due to strong portfolio purchases [7] - The cash efficiency ratio is projected to exceed 60% in 2025, with a return on average tangible equity estimated at around 12% [7] Financial Position - As of December 31, 2024, PRA Group had cash and cash equivalents of $105.9 million, a decline of 5.9% from the end of 2023 [5] - Total assets increased by 9% to $4.9 billion, while borrowings rose by 14.1% to $3.3 billion [5]

Core Insights - PRA Group, Inc. and StepChange Debt Charity are collaborating to address issues affecting individuals in debt in the UK, emphasizing the need for financial inclusion and resilience among households [1][2][3] Group 1: Partnership and Initiatives - The partnership between PRA Group UK and StepChange focuses on consumer strategies to tackle cost-of-living challenges and the impact of credit scores on consumers [3] - A roundtable discussion was held at the House of Lords, led by key stakeholders from various sectors, to explore practical solutions for improving credit reporting and supporting those in debt [1][2] Group 2: Research Findings - The Financial Conduct Authority (FCA) conducted a Credit Information Market Study, revealing that the current credit reporting framework may not yield consistent outcomes for consumers, which aligns with StepChange's findings that credit score concerns hinder individuals from seeking help [4] - Research from PRA Group UK indicates that individuals recovering from financial difficulties often remain financially excluded for extended periods [4] Group 3: Recommendations and Future Outlook - The FCA has proposed recommendations to address challenges faced by borrowers, with the aim of enhancing financial inclusion and enabling those repaying debt to access affordable credit [5] - Stakeholders at the roundtable are working to advance these recommendations through practical credit reporting solutions, which could facilitate re-entry into the financial ecosystem for those in debt [5]

PRA Group Q4 and FY 2024 Conference Call Presentation Nasdaq: PRAA Forward-Looking Statements Statements in this presentation, other than statements of historical fact, are forward-looking statements, which are based on our current beliefs, projections, assumptions and expectations concerning future operations and financial performance. Such statements involve uncertainties and risks, some of which are not currently known to us, and may be superseded by future events that could cause actual results to diffe ...

Financial Data and Key Metrics Changes - Record portfolio purchases of $1.4 billion, up 22% year-over-year [8][27] - Cash collections of $1.9 billion for the year, representing 13% year-over-year growth [10][37] - Net income attributable to PRA of $71 million, translating to a return on average tangible equity of 10%, a significant improvement from negative 11% in 2023 [11][49] - Total revenues were $293 million for the quarter and $1.1 billion for the full year, up 32% and 39% respectively [31] Business Line Data and Key Metrics Changes - U.S. portfolio purchases were $796 million for the full year, up 40% year-over-year [28] - European portfolio purchases were $229 million for the quarter, up 86% year-over-year [30] - U.S. legal cash collections increased 42% to $376 million from $264 million in 2023 [21] Market Data and Key Metrics Changes - Strong portfolio supply in the U.S. driven by rising credit card balances and elevated charge-off rates [29] - European business demonstrated strong market position with healthy diversification across markets [13][14] Company Strategy and Development Direction - Three strategic pillars driving enhanced profitability: optimizing investments, driving operational execution, and managing expenses [18] - Focus on expanding offshore teams to improve cost structure and efficiency [23][24] - Continued investment in legal collections channel expected to drive future cash collections [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate short-term consumer pressures due to the long-term nature of their collections model [40] - Anticipated strong U.S. portfolio supply in 2025, driven by rising credit card balances [19] - Management remains optimistic about the company's transformation and growth potential [25][50] Other Important Information - ERC at December 31, 2024, was $7.5 billion, up 17% compared to the previous year [41] - Debt-to-adjusted EBITDA ratio was 2.92 times, within the long-term target range [43][44] - Company expects to exceed $1.2 billion in portfolio purchases for 2025 [48] Q&A Session Summary Question: Insights on European market supply and competition - Management noted an unusually large volume of market supply in Europe, but did not see significant changes in competition [54][56] Question: Thoughts on cash efficiency ratio and potential ceilings - Management indicated expectations for improved cash efficiency ratios in the short and long term, driven by operational efficiencies and technology [59][63] Question: Regulatory landscape and potential new competitors - Management expressed that while the regulatory environment is being monitored, significant barriers remain for new entrants into the market [66][68] Question: Legal expenses and efficiency ratio expectations - Management confirmed that legal expenses are expected to fluctuate based on portfolio mix and investments, but they remain confident in achieving efficiency targets [110][112]

Financial Performance - PRA Group reported quarterly earnings of $0.47 per share, exceeding the Zacks Consensus Estimate of $0.45 per share, compared to a loss of $0.22 per share a year ago, representing an earnings surprise of 4.44% [1] - The company posted revenues of $293.23 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 5.95%, and up from $221.42 million year-over-year [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.38 on revenues of $284.91 million, and for the current fiscal year, it is $2.01 on revenues of $1.17 billion [7] - The estimate revisions trend for PRA Group is mixed, leading to a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Industry Context - The Financial - Miscellaneous Services industry, to which PRA Group belongs, is currently in the top 21% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Net income attributable to PRA Group, Inc. for Q4 2024 was $18.5 million, with diluted earnings per share of $0.47, compared to a net loss of $8.8 million in Q4 2023[2]. - Total revenues for Q4 2024 reached $293.2 million, a 32.4% increase from $221.4 million in Q4 2023[20]. - Net income attributable to PRA Group, Inc. was $18.5 million in Q4 2024, compared to a net loss of $8.8 million in Q4 2023[20]. - The net income attributable to PRA Group, Inc. for 2024 was $71 million, a significant recovery from a net loss of $83 million in 2023[36]. - The company's return on average tangible equity (ROATE) improved to 9.5% in 2024, compared to a negative 11.3% in 2023[37]. Portfolio and Collections - Total portfolio purchases reached a record $1.4 billion in 2024, representing a 22% increase year-over-year, with Q4 2024 purchases totaling $432.7 million[3]. - Total cash collections for Q4 2024 increased by 14.1% to $468.1 million, compared to $410.3 million in Q4 2023, and for the full year, cash collections grew by 12.5% to $1.9 billion[4]. - Total portfolio revenue in Q4 2024 increased by 31.1% to $285.0 million, while full-year revenue rose by 39.7% to $1.1 billion[5]. - Total estimated collections for the Americas and Australia core from 1996 to 2024 amount to $18,145,771, with a current purchase price multiple of 211% for 2024[26]. - Total estimated collections for Europe core from 2012 to 2024 amount to $9,940,185, with a current purchase price multiple of 180% for 2024[26]. - The total PRA Group's estimated collections are $32,112,139, with total net finance receivables of $7,460,626 as of December 31, 2024[29]. - The remaining collections for the Americas and Australia core as of 2024 are estimated at $1,593,881[26]. - The remaining collections for Europe core as of 2024 are estimated at $770,745[26]. Expenses and Liabilities - Operating expenses for Q4 2024 increased by 13.2% to $199.1 million, driven by higher legal collection costs and fees[6]. - Interest expense for the full year increased by 26.2% to $229.3 million, reflecting higher debt balances to support portfolio investments[11]. - Total liabilities increased to $3.74 billion as of December 31, 2024, compared to $3.29 billion a year earlier, marking a 13.7% rise[22]. - The company recorded an income tax expense of $21 million in 2024, compared to a benefit of $16 million in 2023[36]. - Depreciation and amortization expenses decreased to $11 million in 2024 from $13 million in 2023[36]. Cash Efficiency and Financial Ratios - The cash efficiency ratio improved to 58.8% for the full year 2024, compared to 58.0% in Q4 2024[3]. - Average tangible equity for 2024 was reported at $741,862 thousand, slightly down from $741,950 thousand in 2023[37]. - Total stockholders' equity for PRA Group, Inc. decreased to $1,135,032 thousand in 2024 from $1,167,112 thousand in 2023, reflecting a decline of about 2.7%[37]. - PRA Group reported an adjusted EBITDA of $1,138 million for 2024, an increase from $1,007 million in 2023, representing a growth of approximately 13%[36]. Future Projections and Targets - The company updated its 2025 financial targets, raising the portfolio purchases target to $1.2 billion[4]. - Total availability under the company's credit facilities as of December 31, 2024, was $1.0 billion[8]. - The projected cash collections for 2024 are expected to be $823.7 million, indicating a further increase of 32.3% compared to 2023[33].

Transformational Year Culminates in Return to Enhanced ProfitabilityRecord Portfolio Purchases of $1.4 Billion and Cash Collections Growth of 13% to $1.9 BillionCompany Updates 2025 Financial Targets, Raising Portfolio Purchases Target to $1.2 BillionNORFOLK, Va., Feb. 19, 2025 /PRNewswire/ -- PRA Group, Inc. (Nasdaq: PRAA) (the "Company"), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the fourth quarter ("Q4 2024") and full year of 2024.  Q4 2024 ...