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PRA Group Looks Like a Smart Buy Right Now With Tailwinds Building Up

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Key Takeaways

  • PRA Group posted Q3 2025 cash collections of $542.2M, up 13.7% year over year.
  • PRAA is focusing on selective, value-oriented portfolio purchases with a $1.2B 2025 target.
  • Consensus sees PRAA's 2025 revenues up 5.4%, with expectations for stronger performance in 2026.

PRA Group, Inc. (PRAA - Free Report) is well-poised to grow, backed by its improving cash collection efficiency in the U.S. market and higher portfolio income. It is one of the largest specialized buyers and collectors of charged-off consumer debt, with long-standing bank relationships, large-scale data and legal infrastructure that smaller players struggle to replicate.

PRA Group — with a market cap of nearly $667 million — has operations in the Americas, Australia and Europe. Courtesy of solid prospects, this Zacks Rank #2 (Buy) stock is worth adding to your portfolio at the moment.

Let’s delve deeper.

PRAA recorded total cash collections of $542.2 million in the third quarter of 2025, representing a 13.7% year-over-year increase. This reflects both the success of recent portfolio acquisitions and strong underlying debtor recovery, especially across its U.S. and European operations. That consistent cash inflow underpins the core business model of acquiring non-performing loan (NPL) portfolios. The adjusted cash efficiency ratio was 61.3% in the first nine months of 2025, up from 59% a year ago.

In the last reported quarter, total portfolio purchases were $255.5 million, down year over year, signaling a shift from volume to selectivity and value-oriented buying. Management reiterated its 2025 target of $1.2 billion in total portfolio purchases, demonstrating a commitment to disciplined deployment rather than aggressive accumulation. This strategy helps preserve long-term returns by avoiding overpaying for portfolios and ensures PRAA focuses on NPLs that meet its return thresholds.

The Zacks Consensus Estimate for PRA Group’s 2025 bottom line of $1.45 per share has improved 8.2% over the past month. During this time, it has witnessed one upward estimate revision and no movement in the opposite direction. The consensus mark for the 2026 bottom line indicates a further 55.2% rise. The company beat earnings estimates in three of the last four quarters and missed once, the average surprise being 1.7%. This is depicted in the graph below.

PRA Group, Inc. Price, Consensus and EPS Surprise

PRA Group, Inc. Price, Consensus and EPS Surprise

PRA Group, Inc. price-consensus-eps-surprise-chart | PRA Group, Inc. Quote

The consensus estimate for 2025 revenues stands at $1.17 billion, signaling a 5.4% year-over-year increase. Its performance is expected to improve in 2026 as the company intends to make more profitable purchases, which will constitute a larger part of its portfolio. The consensus mark for 2026 revenues indicates a further 7.3% increase.

Key Risks

There are a few factors that can hold the stock back. Its total debt to total capital of 79.2% is much higher than the industry’s figure of 51.1%. High borrowing costs and increased leverage are leading to higher interest expenses. Also, PRAA witnessed negative free cash flow in 2023, 2024 and the first nine months of 2025. However, we believe that a systematic and strategic plan of action will drive its long-term growth.

Other Key Picks

Investors interested in the broader Finance space can also consider some other top-ranked companies like Bread Financial Holdings, Inc. (BFH - Free Report) and StoneX Group Inc. (SNEX - Free Report) . Bread Financial and StoneX currently have a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The consensus mark for Bread Financial’s current year earnings is pegged at $10.14 per share, indicating 33.4% year-over-year growth. Furthermore, the consensus estimate for BFH’s 2025 revenues is pegged at $3.82 billion.

The Zacks Consensus Estimate for StoneX’s current year earnings indicates a 23.9% increase from the year-ago period. Also, the consensus mark for SNEX’s revenues for the current year suggests 15.8% year-over-year growth.


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