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Here's Why PRA Group Stock Remains a Buy Despite Few Risks
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Key Takeaways
PRA Group posted record $8.9B estimated remaining collections, up 7% year over year.
PRAA's cash collections rose 4% to $559M, led by U.S. legal and digital channels.
PRAA's $3.8B debt and rising interest expense could weigh on earnings growth.
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 $712.7 million, PRA Group continues to strengthen its operating performance through disciplined portfolio management and enhanced collection strategies. The stock has gained 16.3% over the past year, significantly outperforming the industry’s 25.9% decline during the same period.
Courtesy of solid prospects, PRA Group currently flaunts a Zacks Rank #1 (Buy) and a Value Score of B.
Where Do PRAA’s Estimates Stand?
The Zacks Consensus Estimate for PRA Group’s 2026 earnings is pegged at $3.93 per share, indicating a 113.6% year-over-year rise. In the past 60 days, it has witnessed two upward estimate revisions against no movement in the opposite direction. The consensus mark for revenues is pegged at $1.35 billion for 2026, implying a 12.2% year-over-year rise. The company beat earnings estimates in each of the last four quarters, with an average surprise of 107.9%.
PRA Group is building a stronger growth base through continued portfolio investments and collection growth. The company purchased $296.6 million of nonperforming loan portfolios in the second quarter, while estimated remaining collections reached a record $8.9 billion, up 7% year over year. Using average purchase price multiples from the first half of 2026, PRAA expects to invest about $1 billion over the next 12 months to maintain its current ERC levels.
Collection performance remains another important growth driver. Cash collections increased 4% year over year to $559 million in the second quarter of 2026, supported by continued strength in the U.S. legal and digital channels and the European business. U.S. legal collections jumped 26% to $150 million, while nearly half of new U.S. payment plans came through digital channels, showing the growing contribution of these collection methods.
Portfolio income is also supporting revenue growth. The metric increased 7% year over year to $267.8 million in the second quarter, outpacing cash-collection growth and remaining the largest contributor to portfolio revenues. The company attributed the increase to strong recent purchases at attractive returns. In addition, the $349 million increase in European ERC is expected to support higher portfolio income over time.
PRAA is investing in technology and collection capabilities to improve efficiency. Investments in legal collections, digital channels, and technology are helping boost collections while improving cost efficiency. The company is also reducing its U.S. call-center operations and expanding its use of AI to lower costs and improve efficiency.
PRAA's PRA 3.0 strategy ties these initiatives together through disciplined capital allocation, operational and technology improvements, and a stronger performance culture. The focus is on deploying capital where returns meet its thresholds rather than pursuing portfolio volume for its own sake. With record ERC, growing adjusted EBITDA and continued investment in collection capabilities, PRAA has a credible foundation for improving operating efficiency and driving long-term earnings growth.
Key Risks
There are several factors that could limit the stock's upside potential.
PRAA remains capital-intensive, with $3.8 billion of borrowings as of June 30, 2026. Net interest expense rose to $64 million in the second quarter from $62 million a year ago, mainly due to higher debt balances. Continued capital requirements and interest expense could weigh on earnings growth.
PRAA's profitability also depends on acquiring nonperforming loan portfolios at attractive prices and generating sufficient collections over time. Competition remains high in the U.S. and European markets, which could push purchase prices higher and reduce the potential returns on newly acquired portfolios.
The Zacks Consensus Estimate for Bread Financial's 2026 earnings is pegged at $12.10 per share. Over the past 60 days, the estimate has seen four upward revisions with no movement in the opposite direction. BFH beat earnings estimates in each of the trailing four quarters, with the average surprise being 147.1%. The consensus estimate for 2026 revenues is pinned at $3.98 billion, indicating 3.6% year-over-year growth.
The Zacks Consensus Estimate for Encore Capital’s 2026 earnings is pegged at $13.52 per share, which has witnessed three upward revisions in the past 60 days, with no movement in the opposite direction. ECPG beat earnings estimates in three of the trailing four quarters and missed in the remaining one, with the average surprise being 32.1%. The consensus estimate for 2026 revenues is pinned at $1.93 billion, indicating 8.9% year-over-year growth.
The Zacks Consensus Estimate for Atlanticus Holdings’ 2026 earnings is pegged at $9.73 per share, indicating 56.2% year-over-year growth. ATLC beat earnings estimates in three of the trailing four quarters and matched in one, with an average surprise of 11.5%. The consensus estimate for 2026 revenues is pinned at $3.08 billion, implying 56.6% year-over-year growth.
View the Zacks #1 Rank List
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Here's Why PRA Group Stock Remains a Buy Despite Few Risks
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 $712.7 million, PRA Group continues to strengthen its operating performance through disciplined portfolio management and enhanced collection strategies. The stock has gained 16.3% over the past year, significantly outperforming the industry’s 25.9% decline during the same period.
Courtesy of solid prospects, PRA Group currently flaunts a Zacks Rank #1 (Buy) and a Value Score of B.
Where Do PRAA’s Estimates Stand?
The Zacks Consensus Estimate for PRA Group’s 2026 earnings is pegged at $3.93 per share, indicating a 113.6% year-over-year rise. In the past 60 days, it has witnessed two upward estimate revisions against no movement in the opposite direction. The consensus mark for revenues is pegged at $1.35 billion for 2026, implying a 12.2% year-over-year rise. The company beat earnings estimates in each of the last four quarters, with an average surprise of 107.9%.
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 is building a stronger growth base through continued portfolio investments and collection growth. The company purchased $296.6 million of nonperforming loan portfolios in the second quarter, while estimated remaining collections reached a record $8.9 billion, up 7% year over year. Using average purchase price multiples from the first half of 2026, PRAA expects to invest about $1 billion over the next 12 months to maintain its current ERC levels.
Collection performance remains another important growth driver. Cash collections increased 4% year over year to $559 million in the second quarter of 2026, supported by continued strength in the U.S. legal and digital channels and the European business. U.S. legal collections jumped 26% to $150 million, while nearly half of new U.S. payment plans came through digital channels, showing the growing contribution of these collection methods.
Portfolio income is also supporting revenue growth. The metric increased 7% year over year to $267.8 million in the second quarter, outpacing cash-collection growth and remaining the largest contributor to portfolio revenues. The company attributed the increase to strong recent purchases at attractive returns. In addition, the $349 million increase in European ERC is expected to support higher portfolio income over time.
PRAA is investing in technology and collection capabilities to improve efficiency. Investments in legal collections, digital channels, and technology are helping boost collections while improving cost efficiency. The company is also reducing its U.S. call-center operations and expanding its use of AI to lower costs and improve efficiency.
PRAA's PRA 3.0 strategy ties these initiatives together through disciplined capital allocation, operational and technology improvements, and a stronger performance culture. The focus is on deploying capital where returns meet its thresholds rather than pursuing portfolio volume for its own sake. With record ERC, growing adjusted EBITDA and continued investment in collection capabilities, PRAA has a credible foundation for improving operating efficiency and driving long-term earnings growth.
Key Risks
There are several factors that could limit the stock's upside potential.
PRAA remains capital-intensive, with $3.8 billion of borrowings as of June 30, 2026. Net interest expense rose to $64 million in the second quarter from $62 million a year ago, mainly due to higher debt balances. Continued capital requirements and interest expense could weigh on earnings growth.
PRAA's profitability also depends on acquiring nonperforming loan portfolios at attractive prices and generating sufficient collections over time. Competition remains high in the U.S. and European markets, which could push purchase prices higher and reduce the potential returns on newly acquired portfolios.
Other Key Picks
Investors interested in the broader Finance space may consider some other top-ranked stocks like Bread Financial Holdings, Inc. (BFH - Free Report) , sporting a Zacks Rank #1 at present, and Encore Capital Group, Inc. (ECPG - Free Report) and Atlanticus Holdings Corporation (ATLC - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Bread Financial's 2026 earnings is pegged at $12.10 per share. Over the past 60 days, the estimate has seen four upward revisions with no movement in the opposite direction. BFH beat earnings estimates in each of the trailing four quarters, with the average surprise being 147.1%. The consensus estimate for 2026 revenues is pinned at $3.98 billion, indicating 3.6% year-over-year growth.
The Zacks Consensus Estimate for Encore Capital’s 2026 earnings is pegged at $13.52 per share, which has witnessed three upward revisions in the past 60 days, with no movement in the opposite direction. ECPG beat earnings estimates in three of the trailing four quarters and missed in the remaining one, with the average surprise being 32.1%. The consensus estimate for 2026 revenues is pinned at $1.93 billion, indicating 8.9% year-over-year growth.
The Zacks Consensus Estimate for Atlanticus Holdings’ 2026 earnings is pegged at $9.73 per share, indicating 56.2% year-over-year growth. ATLC beat earnings estimates in three of the trailing four quarters and matched in one, with an average surprise of 11.5%. The consensus estimate for 2026 revenues is pinned at $3.08 billion, implying 56.6% year-over-year growth.