Can Increased Cash Recoveries Drive PRA Group's Fourth Quarter Profits?

PRA Group, Inc. Q4 2025 Earnings Preview

PRA Group, Inc., a company specializing in acquiring nonperforming loan portfolios, will announce its fourth-quarter 2025 financial results on February 26, 2026, following market close. Analysts currently forecast earnings of $0.50 per share and revenues of $304.18 million for the quarter.

Over the past two months, the earnings estimate for the fourth quarter has remained unchanged. This projection points to a 6.4% increase in earnings compared to the same period last year. Revenue expectations also reflect a 3.7% year-over-year rise.

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For the full year 2025, PRA Group’s revenue is anticipated to reach $1.17 billion, representing a 5.2% increase from the previous year. However, the consensus estimate for earnings per share stands at $1.45, which would mark a 19% decline year over year.

Looking at recent performance, PRA Group has surpassed earnings expectations in three out of the last four quarters, while falling short once. The average earnings surprise during this period was 1.7%.

Price and Earnings Performance Overview

Q4 Earnings Outlook for PRA Group

Current models do not strongly indicate that PRA Group will outperform earnings expectations this quarter. Typically, a positive Earnings ESP combined with a Zacks Rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold) increases the likelihood of an earnings beat. However, PRA Group’s Earnings ESP is 0.00% and it holds a Zacks Rank #3, making an earnings beat less probable.

Key Factors Influencing PRA Group’s Q4 Results

• Improved cash collections, increased portfolio income, and disciplined purchasing are expected to have contributed positively in the fourth quarter.
• Strength in the Americas and Australia Core segments likely supported collection growth, with total cash collections estimated to rise 10.4% year over year.
• Recent portfolio acquisitions at better returns may have boosted portfolio income, which is projected at $262.5 million—a 14.3% increase from last year.
• Despite these positives, expected recoveries are forecasted at $35 million, a 36.7% decrease year over year, and other revenues are estimated at $3.1 million, down 62.6% compared to the prior year.
• Operating expenses are anticipated to be higher due to increased legal and other costs, which could impact the company’s ability to beat earnings estimates.

Performance of Other Finance Sector Stocks

• Capital One (COF): Reported adjusted earnings of $3.86 per share for Q4 2025, missing the consensus estimate of $4.12. Despite higher expenses and provisions, earnings improved from $3.09 last year, driven by increased net interest and non-interest income and higher loan balances.
• Blue Owl Capital Corporation (OBDC): Delivered adjusted EPS of $0.36, beating estimates by 1.9% but declining 23.4% year over year. Total investment income grew 13.5% to $447.8 million, though higher expenses offset some gains.
• Ares Capital Corporation (ARCC): Achieved core earnings of $0.50 per share, matching consensus estimates. Total investment income was higher, but earnings fell 9.1% from the previous year due to increased expenses.

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