In a report released today, Dominick Gabriele from Oppenheimer maintained a Hold rating on Pra Group (PRAA). The company’s shares closed yesterday at $31.80, close to its 52-week low of $29.69.
Gabriele observed:
“PRAA reported $0.22 vs. our $0.39 estimate, weaker due to $8M higher legal channel expenses and $6M higher allowance charge. The quarter was also helped by a better than expected tax rate of 12.5% vs. our 18% estimate. PRAA decided to ramp collections through the legal channel as previously implied and thus legal collection expenses were higher. We now see a run rate in the low to mid $40M range or ~12M higher per quarter in 2019 than we originally expected. Benefits to cash collections likely have a six-month lag to legal expense incurred. But we should see related cash collections accelerate starting in 1Q19. We expect consensus to come down closer to our estimates and think investors can remain patient.”
According to TipRanks.com, Gabriele is a 2-star analyst with an average return of 0.0% and a 55.6% success rate. Gabriele covers the Financial sector, focusing on stocks such as Credit Acceptance Corp, Santander Consumer USA, and Capital One Financial.
Pra Group has an analyst consensus of Hold.
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Pra Group’s market cap is currently $1.44B and has a P/E ratio of 10.06. The company has a Price to Book ratio of 1.31.
Based on the recent corporate insider activity of 93 insiders, corporate insider sentiment is negative on the stock.
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PRA Group, Inc. engages in the purchase, collection and management of portfolios of defaulted consumer receivables. It focuses on the acquisition, collection, and processing of both unpaid and normal course accounts receivable originally owed to credit grantors, governments, retailers and others.
