Debt collection firm PRA Group reports Q3 net loss on impairment charge

Overview

• PRA Group Q3 net loss due to $413 mln goodwill impairment charge

• Cash collections rise 14% yr/yr, driven by U.S. legal collections and European performance

• Adjusted net income for Q3 reaches $21 mln, excluding goodwill impairment

Outlook

• Company targets $1.2 bln in portfolio purchases for 2025

• Company has $297.8 mln in estimated forward flow commitments over next 12 months

• Company investing in U.S. legal collections channel to drive growth

Result Drivers

• CASH COLLECTIONS GROWTH - Cash collections increased 13.7% to $542.2 mln, driven by recent portfolio purchases and strong European performance

• U.S. LEGAL COLLECTIONS - Investments in U.S. legal collections led to a 27% increase in cash collections from this channel

• GOODWILL IMPAIRMENT - A $413 mln non-cash goodwill impairment charge related to a European acquisition impacted net results

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the corporate financial services peer group is "buy"

• Wall Street's median 12-month price target for PRA Group Inc is $24.00, about 42.9% above its October 31 closing price of $13.71

• The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 8 three months ago

Press Release: ID:nPngcFd8a

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)