- PRA Group has posted some strong recent quarters in terms of collections and operating efficiency, but weak purchasing activity has investors worried about the long-term growth outlook.
- Stimulus efforts have aided consumer solvency, but the reopening of the economy should drive an increase in charge-offs, even at a lower than previously hoped-for rate.
- A return to increased legal collections and bankruptcy collections could help drive growth, with growing utilization of higher-margin digital collections offsetting some of the margin pressures.
- PRA Group shares look undervalued below the low-to-mid $40s, but the shares may continue to lag so long as the Street is worried about purchases and the prospect of softer near-term growth.
For further details see:
Worries About Growth Keeping A Lid On PRA Group Shares