Investors in PRA Group Inc (PRAA, Financial) have witnessed a notable uptick in the company's stock price, with a 3.64% gain over the past week and an impressive 35.26% surge over the past three months. The current market capitalization stands at $1.13 billion, with the stock price at $28.8. This recent performance has brought PRA Group's valuation in line with the GF Value of $32.06, indicating that the stock is now considered fairly valued. This is a significant shift from the past GF Value of $32.59, where the stock was previously seen as a possible value trap, suggesting investors should think twice before investing.
Introduction to PRA Group Inc
PRA Group Inc, operating within the credit services industry, is a leading entity in the acquisition and collection of nonperforming loans. The company plays a pivotal role in returning capital to banks and other creditors, thereby facilitating the expansion of financial services across the Americas, Europe, and Australia. PRA Group's global workforce is dedicated to collaborating with customers to resolve their debt. 
Assessing PRA Group's Profitability
With a Profitability Rank of 7/10, PRA Group demonstrates a strong ability to generate profits relative to its industry peers. The company's operating margin stands at 4.01%, outperforming 30.97% of its competitors. Despite a negative Return on Equity (ROE) of -5.06% and Return on Assets (ROA) of -1.38%, PRA Group still ranks better than 16.12% and 21.81% of industry peers, respectively. The Return on Invested Capital (ROIC) is 0.68%, which is more favorable than 35.44% of the companies in the industry. Notably, PRA Group has maintained profitability for the past 10 years, a testament to its consistent performance. 
Growth Trajectory of PRA Group
The company's Growth Rank is 5/10, reflecting moderate growth in revenue and profitability. PRA Group's 3-year revenue growth rate per share is 3.60%, which is better than nearly half of its industry counterparts. Over a 5-year period, the revenue growth rate per share increases to 6.60%, surpassing 55.81% of the industry. However, the estimated total revenue growth rate for the next 3 to 5 years is projected at -3.99%, which, while not robust, still outperforms 5% of its peers. The 3-year EPS without NRI growth rate is an impressive 20.40%, and the 5-year rate is 15.10%, both metrics indicating strong growth compared to industry peers. 
Influential Investors in PRA Group
Notable investors have taken positions in PRA Group, with Chuck Royce (Trades, Portfolio) holding 817,665 shares, representing a 2.08% stake in the company. Jim Simons (Trades, Portfolio), another prominent investor, holds 28,197 shares, accounting for 0.07% of the company's shares. These investments by major holders underscore a vote of confidence in PRA Group's business model and future prospects.
Competitive Landscape
When compared to its competitors, PRA Group holds a solid market position. LendingClub Corp (LC, Financial) has a market capitalization of $959.469 million, Open Lending Corp (LPRO, Financial) is valued at $980.783 million, and World Acceptance Corp (WRLD, Financial) stands at $824.363 million. PRA Group's market cap of $1.13 billion places it at the forefront among these close competitors, indicating a strong market presence within the credit services industry.
Conclusion
In summary, PRA Group Inc's recent stock performance reflects a significant turnaround from being viewed as a possible value trap to being fairly valued according to the GF Value. The company's profitability metrics, although mixed, demonstrate resilience in a competitive industry. Growth indicators reveal a company that has experienced steady revenue increases and robust EPS growth rates. The confidence shown by major investors, along with a leading market cap compared to its competitors, positions PRA Group as a noteworthy player in the credit services sector. Investors may find PRA Group's recent trajectory and current valuation an interesting case study in market dynamics and company performance.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
