Pra Group Stock Fair Value – PRA Group Reports Disappointing Non-GAAP EPS and Revenue Misses
May 9, 2023
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PRA ($NASDAQ:PRAA) Group Inc., a global leader in credit and accounts receivable management, recently reported disappointing Non-GAAP earnings per share (EPS) and revenue that fell short of analysts’ expectations. This news has sent shockwaves through the stock market and caused PRA Group’s share price to drop in response. PRA Group is a financial services firm operating in North America, Europe, and India. The company specializes in consumer debt collection, data analytics, and customer engagement services.
PRA Group’s mission is to help businesses resolve consumer debt while still providing customer-centric experiences. The company has been successful in providing these services to numerous companies and organizations, allowing them to improve their financial performance while still maintaining customer loyalty.
Earnings
In the recent earning report of fiscal year 2022 Q4 ending December 31 2022, PRA GROUP reported a disappointing non-GAAP earnings per share (EPS) and revenue miss. The total revenue for the quarter stood at 222.85M USD, a 13.3% decrease from the previous year and a 53.4% decrease from their net income. Comparing the last 3 years, PRA GROUP’s total revenue has dropped from 273.86M USD to 222.85M USD. This is a major setback for the company and its shareholders.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Pra Group. More…
| Total Revenues | Net Income | Net Margin |
| 966.52 | 117.15 | 12.0% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Pra Group. More…
| Operations | Investing | Financing |
| 21.59 | 120.45 | -121.34 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Pra Group. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 4.18k | 2.89k | 31.49 |
Key Ratios Snapshot
Some of the financial key ratios for Pra Group are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| -0.9% | 4.9% | 28.7% |
| FCF Margin | ROE | ROA |
| 0.9% | 14.7% | 4.2% |
Market Price
On Monday, PRA Group reported disappointing non-GAAP earnings per share (EPS) and revenue misses. As a result, the stock opened at $34.9 and closed at $34.4, down by 0.9% from the prior closing price of $34.7. The lower than expected earnings and revenue sent shockwaves through the market, with investors reacting negatively to the news.
This is a far cry from the impressive growth that PRA Group had been showing in recent years. Investors are now eagerly awaiting the company’s next quarterly results to see how it manages to recover from this disappointment. Live Quote…
Analysis – Pra Group Stock Fair Value
We at GoodWhale have conducted an analysis of PRA GROUP‘s wellbeing. After examining their financial statements, our proprietary Valuation Line has determined that the intrinsic value of PRA GROUP share is around $41.1. However, currently PRA GROUP stock is traded at $34.4, which implies that it is undervalued by 16.3%. We believe this presents a great investment opportunity for those looking to capitalize on the current market dynamics. More…
Peers
PRA Group Inc., Enova International Inc., CURO Group Holdings Corp., and Non-Standard Finance PLC are all companies that compete in the debt collection industry. While PRA Group Inc. is the largest of the four, the other three companies are all major competitors. All four companies use different strategies to try to collect debts, and each has its own strengths and weaknesses. Enova International Inc. is known for its aggressive tactics, which sometimes result in complaints from consumers. CURO Group Holdings Corp. has a more customer-focused approach, and Non-Standard Finance PLC is known for its low-cost debt collection services.
– Enova International Inc ($NYSE:ENVA)
Enova International Inc is a provider of online financial services. The company offers a range of services including online lending, point-of-sale financing, and card services. Enova International Inc has a market cap of 1.21B as of 2022. The company has a return on equity of 15.56%. Enova International Inc provides online financial services to consumers and small businesses. The company offers a range of services including online lending, point-of-sale financing, and card services.
– CURO Group Holdings Corp ($NYSE:CURO)
CURO Group Holdings Corp is a holding company that owns and operates a portfolio of consumer finance brands. The company offers a range of financial products and services, including credit cards, personal loans, and lines of credit. CURO Group Holdings Corp has a market cap of 129.96M as of 2022 and a Return on Equity of -13.26%. The company’s primary brands are CURO and OneMain Financial. CURO Group Holdings Corp is headquartered in Wilmington, Delaware.
– Non-Standard Finance PLC ($LSE:NSF)
As of 2022, Non-Standard Finance PLC has a market cap of 1.92M and a Return on Equity of 61.44%. The company is a provider of non-standard personal credit products in the United Kingdom. The company offers unsecured loans, guarantor loans, and secured loans to individuals who may not be able to obtain credit from traditional sources.
Summary
Investors were disappointed with the latest earnings report from PRA Group (PRAA). The company reported a non-GAAP earnings per share of -$1.50, missing analyst consensus estimates by $1.96. Revenues of $155.47M also missed expectations by $68.05M.
This marks a significant decline in both earnings and revenue, as compared to the same period last year. Going forward, investors will be watching to see if PRA Group can improve its performance or if these results are indicative of a trend.
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