Yahoo Finance PRA Group's (PRAA) Shares Down Despite Q1 Earnings Beat
PRA Group, Inc.’s PRAA shares lost 1.1% since it reported first-quarter 2024 results on May 6, 2024. Despite an earnings beat, investors might have been worried about increased legal collection fees and expenses. However, the negatives were partially offset by robust portfolio income, growing cash collection, improving pricing and better operational results in Brazil, Europe and the United States.
PRAA reported a first-quarter 2024 earnings per share of 9 cents, which outpaced the Zacks Consensus Estimate by a whopping 160%. An adjusted operating loss of $1.5 per share was incurred in the prior-year quarter.
Total revenues of $256 million rose 65.2% year over year in the quarter under review. The top line outpaced the consensus mark by 12.5%.
PRA Group, Inc. Price, Consensus and EPS Surprise
PRA Group, Inc. price-consensus-eps-surprise-chart | PRA Group, Inc. Quote
Quarterly Operational Update
Total cash collections of PRA Group grew 9% year over year to $449.5 million, which beat the Zacks Consensus Estimate by 1.8%. The metric benefited on the back of higher cash collections from Brazil, Europe, and the United States.
The portfolio income of $202.1 million advanced 7.3% year over year in the first quarter but marginally missed the consensus mark. Other revenues declined 55.2% year over year to $1.9 million, missing the consensus mark by 58.7%.
Total operating expenses of $189.2 million increased by a small margin year over year due to legal collection costs and fees, agency fees, and communication expenses.
PRA Group reported a net income of $11.8 million in the quarter under review against the prior-year quarter’s net loss of $53.9 million.
The company purchased nonperforming loan portfolios of $245.8 million in the first quarter, which increased 6.8% year over year. The cash efficiency ratio was at 58%. The estimated remaining collections (“ERC”) of PRA Group amounted to $6.5 billion at the first-quarter end.
Financial Update (As of Mar 31, 2024)
PRA Group exited the first quarter with cash and cash equivalents of $108.1 million, which declined from $112.5 million at 2023-end. It had $1.2 billion remaining under its credit facilities at the first-quarter end.
Total assets of $4.48 billion decreased from the 2023-end figure of $4.53 billion.
Borrowings were $3 billion, up from the $2.9 billion figure as of Mar 31, 2023. Total equity of $1.2 billion slipped from the 2023-end level of $1.24 billion.
Guidance Reiterated
For 2024, it expects solid portfolio investment levels on the back of higher U.S. portfolio supply and favorable returns. PRAA expects cash collections in 2024 to witness double-digit growth. Its shift to lower-cost locations and expense management is likely to result in modest growth in expenses.
The effective tax rate is expected in the low 20% range this year. The cash efficiency ratio is projected at more than 60% for 2024. It also expects a return on average tangible equity within 6-8% for the year. PRA Group is likely to collect an ERC balance of $1.5 billion within the next 12 months.
Zacks Rank
PRA Group currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Other Finance Sector Players
Here are some other Finance sector players that have reported first-quarter results so far. The bottom-line results of Euronet Worldwide, Inc. EEFT, Virtu Financial, Inc. VIRT and Cboe Global Markets, Inc. CBOE beat the Zacks Consensus Estimate.
Euronet reported first-quarter adjusted earnings of $1.28 per share, which surpassed the Zacks Consensus Estimate by 28%. The bottom line soared 47%. Total revenues were $857 million, which improved 9% year over year and on a constant-currency basis. The top line beat the consensus mark by 2.3%. EEFT’s net income climbed 32.3% year over year to $26.2 million. Operating income of $64 million advanced 40% year over year, or 45% on a constant-currency basis. Adjusted EBITDA rose 17% year over year, or 19% on a constant-currency basis, to $108.8 million.
The EFT Processing segment recorded revenues of $217.2 million, which grew 13% year over year, or 12% on a constant-currency basis. Adjusted EBITDA soared 51% year over year, or 54% on a constant-currency basis, to $44.7 million. Total transactions of the unit climbed 36% to 2,502 million. The epay segment’s revenues advanced 8% year over year and on a constant-currency basis to $257.1 million. The Money Transfer segment generated revenues of $384.6 million, which advanced 7% year over year and on a constant-currency basis.
Virtu Financial reported first-quarter 2024 adjusted earnings per share of 76 cents, which outpaced the Zacks Consensus Estimate by 28.8%. The bottom line advanced 2.7% year over year. Total revenues improved 3.6% to $642.8 million. Adjusted net trading income slid 1.7% to $366.9 million. Revenues from commissions, net and technology services amounted to $118.6 million, which slipped 2.3% year over year. Interest and dividends income of $106 million climbed 28.9% year over year.
Adjusted EBITDA of VIRT declined 2.2% to $202.8 million. Adjusted EBITDA margin of 55.3% deteriorated 30 basis points year over year. Adjusted net trading income in the Market Making segment was $273.7 million, down 1.5% year over year. The segment’s revenues rose 4.4% to $521 million. The Execution Services unit recorded an adjusted net trading income of $93.2 million, which fell 2.1% year over year.
Cboe Global reported first-quarter 2024 adjusted earnings of $2.15 per share, which outpaced the Zacks Consensus Estimate by 5.4%. The bottom line increased 13% year over year. Total adjusted revenues of CBOE Global were $502.1 million, which improved 7% year over year. The top line missed the consensus mark by 1.2%. Options revenues climbed 10% to $307.4 million. Revenues of North American Equities totaled $92.6 million, which decreased 1% year over year. Europe and Asia Pacific revenues increased 10% to $54.1 million.
Futures net revenues decreased 2% year over year to $30.5 million. Global FX net revenues decreased 1% to $18.4 million, primarily due to lower net transaction and clearing fees. Adjusted operating income grew 8% to $309.2 million. Adjusted operating margin was 61.6%, which expanded 110 basis points year over year. Adjusted EBITDA margin of 67.2% expanded 140 bps year over year.
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PRA Group, Inc. (PRAA) : Free Stock Analysis Report
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