PRA Group (NASDAQ:PRAA) Shares Gap Up Following Strong Earnings

Key Points

• PRA Group shares saw a significant increase, opening at $18.57 after closing at $15.63, following a better-than-expected earnings report of $1.08 earnings per share versus a consensus estimate of $0.62.
• Several brokerages have made recent updates on PRA Group, including a downgrade by Wall Street Zen from "hold" to "sell" and an increase in target price by JMP Securities to $24.00 with a "market outperform" rating.
• Director Brett Lee Paschke purchased 5,000 shares at an average price of $13.39, increasing his ownership by nearly 20%, indicating insider confidence in the stock.

PRA Group, Inc. (NASDAQ:PRAA - Get Free Report)'s share price gapped up before the market opened on Tuesday after the company announced better than expected quarterly earnings. The stock had previously closed at $15.63, but opened at $18.57. PRA Group shares last traded at $16.32, with a volume of 80,131 shares changing hands.

The business services provider reported $1.08 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.62 by $0.46. PRA Group had a net margin of 8.10% and a return on equity of 6.52%. The company had revenue of $287.69 million during the quarter, compared to the consensus estimate of $279.34 million.

Wall Street Analyst Weigh In

A number of research firms have recently issued reports on PRAA. Citigroup reiterated an "outperform" rating on shares of PRA Group in a report on Tuesday. Wall Street Zen cut PRA Group from a "hold" rating to a "sell" rating in a research report on Thursday, May 22nd. Finally, JMP Securities set a $24.00 target price on shares of PRA Group and gave the stock a "market outperform" rating in a report on Tuesday.

Hedge Funds Weigh In On PRA Group

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Vanguard Group Inc. increased its position in shares of PRA Group by 0.5% in the first quarter. Vanguard Group Inc. now owns 4,322,609 shares of the business services provider's stock worth $89,132,000 after purchasing an additional 21,934 shares during the period. Wellington Management Group LLP grew its stake in PRA Group by 3.2% during the first quarter. Wellington Management Group LLP now owns 3,881,917 shares of the business services provider's stock worth $80,045,000 after buying an additional 120,965 shares in the last quarter. Global Alpha Capital Management Ltd. increased its holdings in PRA Group by 4.6% in the 2nd quarter. Global Alpha Capital Management Ltd. now owns 2,111,800 shares of the business services provider's stock valued at $31,149,000 after buying an additional 93,600 shares during the period. Dimensional Fund Advisors LP raised its position in shares of PRA Group by 6.7% in the 4th quarter. Dimensional Fund Advisors LP now owns 1,934,124 shares of the business services provider's stock valued at $40,404,000 after buying an additional 121,109 shares in the last quarter. Finally, T. Rowe Price Investment Management Inc. raised its position in shares of PRA Group by 1.2% in the 1st quarter. T. Rowe Price Investment Management Inc. now owns 1,883,567 shares of the business services provider's stock valued at $38,840,000 after buying an additional 21,627 shares in the last quarter. 97.22% of the stock is owned by institutional investors and hedge funds.

PRA Group Stock Performance

The company has a market cap of $621.08 million, a P/E ratio of 6.72 and a beta of 1.54. The stock's fifty day moving average price is $15.23 and its two-hundred day moving average price is $17.77.

About PRA Group

PRA Group, Inc, a financial and business services company, engages in the purchase, collection, and management of portfolios of nonperforming loans worldwide. It is involved in the purchase of accounts that are primarily the unpaid obligations of individuals owed to credit originators, which include banks and other types of consumer, retail, and auto finance companies.