It has been about a month since the last earnings report for PRA Group (PRAA Quick QuotePRAA - Free Report) . Shares have added about 2.2% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is PRA Group due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

PRA Group's Q4 Earnings Beat Estimates, Increase Y/Y

PRA Group's fourth-quarter 2020 earnings per share of 65 cents beat the Zacks Consensus Estimate of 62 cents by 4.8%. Moreover, the bottom line increased 8.3% year over year, primarily owing to an improved top line.

Also, revenues of $274 million were up 1.9% from the year-ago quarter, courtesy of the company’s portfolio income. Further, the top line surpassed the Zacks Consensus Estimate by 9.2%.

The company’s cash collection of $481.9 million climbed 6% from the year-ago figure on the back of nonlegal collections in the United States and by Core and Insolvency in Europe.

Quarterly Operational Update

PRA Group’s fee income of $2.9 million dropped 32% year over year.
The company’s portfolio income came in at $233.5 million  in the quarter under review compared with income recognized from finance receivables of $262.8 million in the prior-year quarter.

Total operating expenses dipped 0.6% over year to $184.6 million, mainly owing to lower legal collection fees.

Moreover, the same was offset by a surge in outside fees and services.

Business Update

The company spent $289.8 million on finance receivables in the quarter under review.

Financial Update (as of Dec 31, 2020)

The company had total assets worth $4.5 billion, up 0.7% from the level at 2019 end.

PRA Group exited the quarter with total equity of $1.3 billion, up 11.9% from the level on Dec 31, 2019.

Cash and cash equivalents in the quarter under discussion were $108.6 million, down 9.3% from the level at 2019 end.

At the end of the fourth quarter, borrowings decreased 5.2% to $2.6 billion from the number at 2019 end.

Full-Year Update

Net income of the company came in at $3.26 per share, up 73% year over year. This compares favorably with the Zacks Consensus Estimate of $3.22 per share.

Total cash collections increased 9% to $2 billion.

Total revenues of the company totalled $1.1 billion, up 5% year over year.
This compares favourably with the consensus mark of $1.04 billion.

 

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month. The consensus estimate has shifted 9.56% due to these changes.

VGM Scores

At this time, PRA Group has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

PRA Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.