We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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.
Should You Hold PRAA Stock on Rising Collections and Portfolio Income?
Read MoreHide Full Article
Key Takeaways
PRA Group posted record portfolio investments, lifting estimated remaining collections to new highs.
PRAA's Q1 2026 cash collections rose 11%, driven by gains in U.S. legal and digital collections.
PRAA plans to invest $1-$1.3 billion under its PRA 3.0 strategy focused on growth and efficiency.
PRA Group, Inc. (PRAA - Free Report) is well positioned for growth, supported by strong portfolio income and improving cash collection performance. The company specializes in acquiring, managing, and collecting nonperforming consumer loan portfolios purchased from banks, credit unions, auto finance companies, retailers, and other credit providers.
With a market capitalization of approximately $550.8 million, PRA Group continues to strengthen its operating performance through efficient portfolio management and enhanced collection strategies. Although the stock has lost 2.6% over the past year, it has shed less value than the industry average of a 19.8% decline.
Courtesy of solid prospects, PRA Group currently has a Zacks Rank #3 (Hold).
Let’s delve deeper.
Where Do PRAA’s Estimates Stand?
The Zacks Consensus Estimate for PRA Group’s 2026 earnings is pegged at $2.52 per share, indicating a 37% year-over-year rise. In the past 30 days, it has witnessed two upward estimate revisions against no movement in the opposite direction. Furthermore, the consensus mark for revenues is pegged at $1.27 billion for 2026, implying a 5.5% year-over-year rise. The company beat earnings estimates in each of the last four quarters, with an average surprise of 78.8%.
PRA Group has strengthened its long-term growth outlook through disciplined portfolio investments and improving collection performance. It purchased a record $1.2 billion of portfolios in 2025 and an additional $221 million in the first quarter of 2026, driving estimated remaining collections to record levels. Supported by these investments and stronger execution, cash collections increased 11% year over year in the first quarter of 2026, aided by a 27% increase in U.S. legal collections and a 19% rise in digital collections.
The increasing contribution from higher-margin portfolio income, alongside better purchase price multiples and consistent cash over-performance, reflects improved quality and predictability. In the first quarter of 2026, portfolio income rose 11.9% year over year to $269.6 million and continues to outpace collection growth, improving earnings quality.
PRA Group's growth strategy is centered on enhancing collection performance and operational efficiency through continued investments in legal collections, digital channels and technology modernization. By investing in legal and digital collection capabilities, modernizing its cloud-based technology infrastructure and optimizing operational processes, the company is positioning itself for more efficient and scalable growth. These initiatives, along with continued cost-control measures and disciplined execution, are expected to enhance collection performance, expand operating leverage and drive long-term profitability.
PRA Group’s long-term strategy, described as its “PRA 3.0” phase, is built on three pillars: disciplined capital allocation, operational and technological transformation, and a strong performance-driven culture. The company plans to invest $1-$1.3 billion over the next few years as part of the 3.0 plan. It focuses on returns over volume, building a lean, AI-enabled platform and driving sustainable earnings growth with stronger shareholder value.
Key Risks
There are several factors that could limit the stock's upside potential.
Total borrowings increased to $3.8 billion as of March 31, 2026, from $3.3 billion at year-end 2024. The company's debt-to-total capital ratio of 78.3% remains well above the industry average of 52.3%, while elevated leverage and higher borrowing costs continue to increase interest expenses and pressure profitability.
PRA Group's profitability depends on acquiring charged-off debt portfolios at attractive prices. Intense competition for portfolios can increase purchase prices and compress future returns.
The Zacks Consensus Estimate for Encore Capital’s 2026 earnings is pegged at $13.01 per share, which has witnessed two upward revisions in the past 30 days, with no movement in the opposite direction. ECPG beat earnings estimates in each of the trailing four quarters, with the average surprise being 52.4%. The consensus estimate for 2026 revenues is pinned at $1.87 billion, indicating 5.5% year-over-year growth.
The Zacks Consensus Estimate for Atlanticus Holdings’ 2026 earnings is pegged at $9.48 per share, indicating 52.2% year-over-year growth. ATLC beat earnings estimates in each of the trailing four quarters, with the average surprise being 15.6%. The consensus estimate for 2026 revenues is pinned at $3.04 billion, implying 54.2% year-over-year growth.
The Zacks Consensus Estimate for Bread Financial's 2026 earnings is pegged at $10.59 per share. Over the past 30 days, the estimate has seen one upward revision and one downward revision. BFH beat earnings estimates in each of the trailing four quarters, with the average surprise being 154.3%. The consensus estimate for 2026 revenues is pinned at $3.94 billion, indicating 2.5% year-over-year growth.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
Should You Hold PRAA Stock on Rising Collections and Portfolio Income?
Key Takeaways
PRA Group, Inc. (PRAA - Free Report) is well positioned for growth, supported by strong portfolio income and improving cash collection performance. The company specializes in acquiring, managing, and collecting nonperforming consumer loan portfolios purchased from banks, credit unions, auto finance companies, retailers, and other credit providers.
With a market capitalization of approximately $550.8 million, PRA Group continues to strengthen its operating performance through efficient portfolio management and enhanced collection strategies. Although the stock has lost 2.6% over the past year, it has shed less value than the industry average of a 19.8% decline.
Courtesy of solid prospects, PRA Group currently has a Zacks Rank #3 (Hold).
Let’s delve deeper.
Where Do PRAA’s Estimates Stand?
The Zacks Consensus Estimate for PRA Group’s 2026 earnings is pegged at $2.52 per share, indicating a 37% year-over-year rise. In the past 30 days, it has witnessed two upward estimate revisions against no movement in the opposite direction. Furthermore, the consensus mark for revenues is pegged at $1.27 billion for 2026, implying a 5.5% year-over-year rise. The company beat earnings estimates in each of the last four quarters, with an average surprise of 78.8%.
PRA Group, Inc. Price, Consensus and EPS Surprise
PRA Group, Inc. price-consensus-eps-surprise-chart | PRA Group, Inc. Quote
PRAA’s Growth Drivers
PRA Group has strengthened its long-term growth outlook through disciplined portfolio investments and improving collection performance. It purchased a record $1.2 billion of portfolios in 2025 and an additional $221 million in the first quarter of 2026, driving estimated remaining collections to record levels. Supported by these investments and stronger execution, cash collections increased 11% year over year in the first quarter of 2026, aided by a 27% increase in U.S. legal collections and a 19% rise in digital collections.
The increasing contribution from higher-margin portfolio income, alongside better purchase price multiples and consistent cash over-performance, reflects improved quality and predictability. In the first quarter of 2026, portfolio income rose 11.9% year over year to $269.6 million and continues to outpace collection growth, improving earnings quality.
PRA Group's growth strategy is centered on enhancing collection performance and operational efficiency through continued investments in legal collections, digital channels and technology modernization. By investing in legal and digital collection capabilities, modernizing its cloud-based technology infrastructure and optimizing operational processes, the company is positioning itself for more efficient and scalable growth. These initiatives, along with continued cost-control measures and disciplined execution, are expected to enhance collection performance, expand operating leverage and drive long-term profitability.
PRA Group’s long-term strategy, described as its “PRA 3.0” phase, is built on three pillars: disciplined capital allocation, operational and technological transformation, and a strong performance-driven culture. The company plans to invest $1-$1.3 billion over the next few years as part of the 3.0 plan. It focuses on returns over volume, building a lean, AI-enabled platform and driving sustainable earnings growth with stronger shareholder value.
Key Risks
There are several factors that could limit the stock's upside potential.
Total borrowings increased to $3.8 billion as of March 31, 2026, from $3.3 billion at year-end 2024. The company's debt-to-total capital ratio of 78.3% remains well above the industry average of 52.3%, while elevated leverage and higher borrowing costs continue to increase interest expenses and pressure profitability.
PRA Group's profitability depends on acquiring charged-off debt portfolios at attractive prices. Intense competition for portfolios can increase purchase prices and compress future returns.
Key Picks
Investors interested in the broader Finance space can look at some better-ranked stocks like Encore Capital Group, Inc. (ECPG - Free Report) , Atlanticus Holdings Corporation (ATLC - Free Report) and Bread Financial Holdings, Inc. (BFH - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Encore Capital’s 2026 earnings is pegged at $13.01 per share, which has witnessed two upward revisions in the past 30 days, with no movement in the opposite direction. ECPG beat earnings estimates in each of the trailing four quarters, with the average surprise being 52.4%. The consensus estimate for 2026 revenues is pinned at $1.87 billion, indicating 5.5% year-over-year growth.
The Zacks Consensus Estimate for Atlanticus Holdings’ 2026 earnings is pegged at $9.48 per share, indicating 52.2% year-over-year growth. ATLC beat earnings estimates in each of the trailing four quarters, with the average surprise being 15.6%. The consensus estimate for 2026 revenues is pinned at $3.04 billion, implying 54.2% year-over-year growth.
The Zacks Consensus Estimate for Bread Financial's 2026 earnings is pegged at $10.59 per share. Over the past 30 days, the estimate has seen one upward revision and one downward revision. BFH beat earnings estimates in each of the trailing four quarters, with the average surprise being 154.3%. The consensus estimate for 2026 revenues is pinned at $3.94 billion, indicating 2.5% year-over-year growth.