PRA Group Q3 Earnings Beat Estimates on Increasing Cash Collections

Shares of PRA Group, Inc. PRAA have risen 0.7% since it reported third-quarter 2025 results on Nov. 3. The quarterly results benefited from improved cash collections and higher portfolio income. However, the upside was partly offset by rising operating costs attributed to higher legal collection costs and fees.

PRA Group reported third-quarter 2025 earnings per share (EPS) of 53 cents, which beat the Zacks Consensus Estimate by 6%. The bottom line rose from 49 cents per share a year ago.

Total revenues improved 10.5% year over year to $311.1 million. The top line beat the consensus mark by 4.7%.

PRA Group, Inc. Price, Consensus and EPS Surprise

PRA Group, Inc. price-consensus-eps-surprise-chart | PRA Group, Inc. Quote

PRA Group’s Quarterly Operational Update

PRA Group’s cash collections were $542.2 million, which advanced 13.7% year over year and beat the Zacks Consensus Estimate of $531 million. The metric was aided by higher cash collections across the United States and Europe.

Portfolio income rose 19.6% year over year to $258.5 million but missed the consensus mark of $261 million. Other revenues of $1.2 million decreased significantly from the figure of $4.7 million a year ago and missed the consensus mark of $4.2 million.

Total operating expenses of $626.7 million rose significantly from the figure of $191.5 million a year ago due to increased legal collection costs, legal collection fees, professional and outside services costs, goodwill impairment and other operating expenses.

PRAA recorded a net loss of $404 million against the prior-year quarter’s income of $28.9 million.

The company purchased nonperforming loan portfolios of $255.5 million, which declined 27% year over year. The adjusted cash efficiency ratio improved 500 basis points year over year to 60.6%. The estimated remaining collections amounted to $8.4 billion at the third-quarter end, up 15.2% year over year.

PRAA’s Financial Update (As of Sept. 30, 2025)

PRA Group exited the third quarter with cash and cash equivalents of $107.5 million, which advanced from the figure of $105.9 million at 2024-end. It had $1.2 billion remaining under its credit facilities at the third-quarter end.

Total assets of $5 billion increased from the 2024-end level of $4.9 billion.

Borrowings were $3.6 billion, which rose from the figure of $3.3 billion as of Dec. 31, 2024.

Total equity of $984 million declined 17.6% from the 2024-end level.

PRAA’s 2025 Outlook

Earlier, management estimated portfolio investments of $1.2 billion for 2025. PRAA forecasted cash collections to witness high-single-digit growth as a result of strong portfolio purchases and benefits from cash-generating initiatives.

The cash efficiency ratio was projected to be more than 60% in 2025. The company expected a return on average tangible equity of around 12%.

PRAA’s Zacks Rank & Other Key Picks

PRAA currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the broader Finance space are T. Rowe Price Group, Inc. TROW, Federated Hermes, Inc. FHI and Ponce Financial Group, Inc. PDLB, each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for T. Rowe Price’s current-year earnings of $9.75 per share has witnessed five upward revisions in the past seven days against none in the opposite direction. T. Rowe Price beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 4%. The consensus estimate for current-year revenues is pegged at $7.2 billion, implying 2.1% year-over-year growth.

The Zacks Consensus Estimate for Federated Hermes’ current-year earnings of $4.84 per share has witnessed three upward revisions in the past seven days against no movement in the opposite direction. Federated Hermes beat earnings estimates in each of the trailing four quarters, with the average surprise being 15.9%. The consensus estimate for current-year revenues is pegged at $1.8 billion, calling for 8.1% year-over-year growth.

The Zacks Consensus Estimate for Ponce Financial Group’s current-year earnings is pegged at $1.05 per share, implying 128.3% year-over-year growth. In the past seven days, Ponce Financial Group has witnessed one upward estimate revision against none in the opposite direction. The consensus mark for the current-year revenues is pegged at $103 million, calling for 23.1% year-over-year growth.

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This article originally published on Zacks Investment Research (zacks.com).

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