Portfolio Recovery Associates, Inc.
(PRAA - Analyst Report
) recently rebounded from a key trend line to move trading within striking distance of its all-time high at $72.80. With a Q2 earnings surprise of 22% and a bullish next-year estimate, this Zacks #1 rank stock has some solid upward momentum.
Portfolio Recovery Associates, Inc. specializes in collecting defaulted consumers receivables. The company was founded in 1996 and has a market cap of $1.16 billion.
With the Great Recession of 2009 pushing unemployment frightfully high, consumers continue to struggle to make ends meet and pay their bills. Although that's bad for the economy, its good for Portfolio Recovery Associates, a trend that helped the company deliver solid Q2 results in late July that easily beat expectations.
Revenue for the period was up 31% from last year to a record $93 million. Earnings also came in strong at $1.14, 23% ahead of the Zacks Consensus Estimate. The company now has an average earnings surprise of 13% over the last three quarters.
The company's key measure of productivity, measured as cash collections per hour paid, came in at a record $185 for the first six months of the year from $145 for all of 2009.
Estimates took a nice jump forward on the good quarter, with the current year gaining 33 cents to $4.16. The next-year estimate is up 46 cents in the same time to $5.07, 1 22% growth projection.
The valuation picture looks pretty solid here too, with a forward P/E of 16.5X compared to the industry average of 17.4X.
On the chart, shares recently rebounded from a key trend line to move back within striking distance of the all-time high at $72.80. The MACD below the chart is bullish, with the short-term moving average moving ahead of the long-term average. Take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service.