PRAA Earnings Prediction
The chart below shows how PRAA performed 10 days before and after its earnings report, based on data from the past quarters. Typically, PRAA sees a -0.68% change in stock price 10 days leading up to the earnings, and a -3.59% change 10 days following the report. On the earnings day itself, the stock moves by +0.60%. This data can give you a slight idea of what to expect for the next quarter's release.
PRAA Key Earning Data
2024/Q4
Year Over Year
Quarter Over Quarter
Total Revenue
235.79M
38.04%
4.55%
Gross Margin
--
--
--
Operating Margin
39.92%
49.12%
0.05%
Net Margin
9.66%
381.63%
-24.65%
EPS
0.47
313.64%
-31.88%
No Data Available
PRAA Earnings Analysis
PRA Group Inc Corporation (PRAA.O) Earnings Conference Call
Positive
Earnings Per Share Beat: PRA Group, Inc. reported an EPS of $0.47, beating expectations of $0.45.
Record Portfolio Purchases: The company achieved record portfolio purchases of $1.4 billion, a 22% increase year-over-year, capitalizing on strong portfolio supply in the U.S.
Cash Collections Growth: Cash collections for the year reached $1.9 billion, representing a 13% year-over-year growth, with 89% of collections coming from portfolios purchased prior to 2024.
Net Income Improvement: Net income attributable to PRA was $71 million, translating to a return on average tangible equity of 10%, a significant improvement from negative 11% in 2023.
Leadership Team Expansion: PRA Group expanded its senior leadership team in 2024, enhancing its operational capabilities and strategic execution.
Cash Efficiency Ratio: The company reported a cash efficiency ratio of 59% for the year, demonstrating disciplined expense management despite increased investments in legal collections.
Legal Cash Collections Surge: U.S. legal cash collections increased by 42% to $376 million, driven by strategic enhancements in operational execution.
Record ERC Growth: ERC reached a record $7.5 billion, up 17% from the previous year, indicating strong future cash collection potential.
Credit Facility Enhancement: PRA Group successfully amended and extended its credit facilities, increasing financial flexibility and capital availability.
Increased Portfolio Purchase Targets: The company raised its 2025 targets for portfolio purchases to $1.2 billion and anticipates high single-digit cash collections growth, reflecting confidence in continued operational success.
Negative
Increased Net Interest Expense: Net interest expense increased by $10 million to $61 million for the quarter, primarily due to higher debt balances from increased portfolio investments, indicating rising financial costs.
Rising Operating Expenses: Operating expenses rose by $23 million or 13% year-over-year to $199 million for the quarter, driven by increased legal collection costs and higher wage costs, which could pressure profitability.
Cash Efficiency Ratio Analysis: The cash efficiency ratio was 59% for the full year, only slightly improved from 58% in 2023, suggesting limited progress in managing operational costs despite increased investments in legal collections.
Debt-to-EBITDA Ratio Increase: The debt-to-adjusted EBITDA ratio was 2.92 times as of December 31, indicating a slight increase in leverage compared to the previous year, which could raise concerns about financial stability during periods of high portfolio purchases.
Foreign Exchange Impact: The company experienced an adverse foreign exchange impact of approximately $300 million due to the strengthening dollar, which negatively affected the total ERC balance.
Portfolio Purchase Sustainability Concerns: Despite achieving record portfolio purchases, the sequential decline in U.S. portfolio purchases in Q4 compared to Q3 raises questions about the sustainability of growth in this segment.
PRAA FAQs
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PRAA Earning Call Sentiment
PRA Group, Inc. (NASDAQ:PRAA) Q4 2024 Earnings Call Transcript
PRAA.O
2.86%Positive
The earnings call highlights strong financial performance with record high revenue, increased EPS, and a return to net income. Despite regulatory and competitive risks, the company maintains a stable market position and anticipates further growth in cash collections and portfolio purchases. The lack of share repurchase or dividend program is a downside, but overall, the optimistic guidance and operational improvements suggest a positive stock price movement.
