We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Higher Expenses Hurt PRA Group's (PRAA) Q4 Earnings?
Read MoreHide Full Article
PRA Group, Inc. (PRAA - Free Report) is set to report its fourth-quarter 2023 results on Feb 15, after the closing bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for fourth-quarter loss per share of 35 cents suggests a 185.4% drop from the prior-year earnings of 41 cents. The consensus mark remained stable over the past week. The consensus estimate for fourth-quarter revenues of $210.3 million indicates a 5.6% decrease from the year-ago reported figure.
PRA Group beat the consensus estimate for earnings in three of the past four quarters and missed once, with the average surprise being negative 80.9%. This is depicted in the graph below:
Before we get into what to expect in the to-be-reported quarter in detail, let’s see how the company performed in the last quarter.
Q3 Earnings Rewind
In the last reported quarter, the global financial and business services company’s adjusted loss per share of 31 cents was narrower than the Zacks Consensus Estimate of a loss of 39 cents per share. The quarterly results gained from robust portfolio purchases, favorable pricing and improved operational results in Brazil and Europe. However, the upside was partially offset by increased expenses related to legal collection fees and agency fees.
The company’s fourth-quarter results are expected to benefit from improved portfolio supply and pricing in the United States amid ongoing credit normalization. The Zacks Consensus Estimate for fourth-quarter Portfolio income indicates a rise of 3.2% year over year. Other Income is expected to rise 4.7% year over year in the fourth quarter.
The company is expected to have completed $1 billion in portfolio investments at the end of the fourth quarter of 2023. Trending charge-off rates toward the high end are likely to have supported its fourth-quarter results.
The Zacks Consensus Estimate predicts cash collections from the Americas and Australia Core to fall 2.9% year over year in the fourth quarter of 2023 due to a lower level of portfolio purchases in the past few years. Americas Insolvency’s cash collections are expected to decline 16.6% in the fourth quarter of 2023. The Zacks Consensus Estimate expects changes in expected recoveries to fall 50.7% year over year in the fourth quarter.
Moreover, as the company continues to undertake several initiatives to drive improvement in customer contact rates and expand legal processes, expenses are expected to rise as a result. The lag between the actions and the corresponding results is expected to put pressure on the bottom line.
Legal collection expenses would come in the low to mid-$20 million range for the fourth quarter, implying a significant increase from the year-ago figure of $9.1 million. Net interest expenses would have come near the low $50 million range in the fourth quarter, significantly higher than the previous year's amount of $34.9 million. The above-mentioned factors are likely to have led to a year-over-year decline in results, making an earnings beat uncertain.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for PRA Group this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate currently stands at a loss of 35 cents per share, in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: PRA Group currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for PRA Group, here are some companies from the broader Finance space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
The Zacks Consensus Estimate for AMH’s bottom line for the to-be-reported quarter suggests a 5% year-over-year jump to 42 cents per share. The estimate remained stable over the past week. The consensus mark for AMH’s revenues is pegged at $402 million, indicating 5.5% year-over-year growth.
Trupanion, Inc. (TRUP - Free Report) has an Earnings ESP of +25.82% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Trupanion’s bottom line for the to-be-reported quarter indicates a 21.7% year-over-year improvement. The estimate remained stable over the past week. Furthermore, TRUP beat earnings estimates in three of the past four quarters and missed once.
Coinbase Global, Inc. (COIN - Free Report) has an Earnings ESP of +200.00% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Coinbase Global’s bottom line for the to-be-reported quarter is pegged at a loss of 6 cents per share, indicating a 97.6% year-over-year improvement. COIN beat earnings estimates in three of the past four quarters, missing once, with an average surprise of 63%.
Image: Bigstock
Will Higher Expenses Hurt PRA Group's (PRAA) Q4 Earnings?
PRA Group, Inc. (PRAA - Free Report) is set to report its fourth-quarter 2023 results on Feb 15, after the closing bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for fourth-quarter loss per share of 35 cents suggests a 185.4% drop from the prior-year earnings of 41 cents. The consensus mark remained stable over the past week. The consensus estimate for fourth-quarter revenues of $210.3 million indicates a 5.6% decrease from the year-ago reported figure.
PRA Group beat the consensus estimate for earnings in three of the past four quarters and missed once, with the average surprise being negative 80.9%. This is depicted in the graph below:
PRA Group, Inc. Price and EPS Surprise
PRA Group, Inc. price-eps-surprise | PRA Group, Inc. Quote
Before we get into what to expect in the to-be-reported quarter in detail, let’s see how the company performed in the last quarter.
Q3 Earnings Rewind
In the last reported quarter, the global financial and business services company’s adjusted loss per share of 31 cents was narrower than the Zacks Consensus Estimate of a loss of 39 cents per share. The quarterly results gained from robust portfolio purchases, favorable pricing and improved operational results in Brazil and Europe. However, the upside was partially offset by increased expenses related to legal collection fees and agency fees.
Now, let’s see how things have shaped up before the fourth-quarter earnings announcement.
Factors to Note
The company’s fourth-quarter results are expected to benefit from improved portfolio supply and pricing in the United States amid ongoing credit normalization. The Zacks Consensus Estimate for fourth-quarter Portfolio income indicates a rise of 3.2% year over year. Other Income is expected to rise 4.7% year over year in the fourth quarter.
The company is expected to have completed $1 billion in portfolio investments at the end of the fourth quarter of 2023. Trending charge-off rates toward the high end are likely to have supported its fourth-quarter results.
The Zacks Consensus Estimate predicts cash collections from the Americas and Australia Core to fall 2.9% year over year in the fourth quarter of 2023 due to a lower level of portfolio purchases in the past few years. Americas Insolvency’s cash collections are expected to decline 16.6% in the fourth quarter of 2023. The Zacks Consensus Estimate expects changes in expected recoveries to fall 50.7% year over year in the fourth quarter.
Moreover, as the company continues to undertake several initiatives to drive improvement in customer contact rates and expand legal processes, expenses are expected to rise as a result. The lag between the actions and the corresponding results is expected to put pressure on the bottom line.
Legal collection expenses would come in the low to mid-$20 million range for the fourth quarter, implying a significant increase from the year-ago figure of $9.1 million. Net interest expenses would have come near the low $50 million range in the fourth quarter, significantly higher than the previous year's amount of $34.9 million. The above-mentioned factors are likely to have led to a year-over-year decline in results, making an earnings beat uncertain.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for PRA Group this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate currently stands at a loss of 35 cents per share, in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: PRA Group currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for PRA Group, here are some companies from the broader Finance space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
American Homes 4 Rent (AMH - Free Report) has an Earnings ESP of +1.68% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AMH’s bottom line for the to-be-reported quarter suggests a 5% year-over-year jump to 42 cents per share. The estimate remained stable over the past week. The consensus mark for AMH’s revenues is pegged at $402 million, indicating 5.5% year-over-year growth.
Trupanion, Inc. (TRUP - Free Report) has an Earnings ESP of +25.82% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Trupanion’s bottom line for the to-be-reported quarter indicates a 21.7% year-over-year improvement. The estimate remained stable over the past week. Furthermore, TRUP beat earnings estimates in three of the past four quarters and missed once.
Coinbase Global, Inc. (COIN - Free Report) has an Earnings ESP of +200.00% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Coinbase Global’s bottom line for the to-be-reported quarter is pegged at a loss of 6 cents per share, indicating a 97.6% year-over-year improvement. COIN beat earnings estimates in three of the past four quarters, missing once, with an average surprise of 63%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.