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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Pra Group, Inc. (XNAS:PRAA) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
PRAA
Name:
PRA GROUP, INC. (XNAS:PRAA)
Sector:
- 26488.00K
Industry:
Credit Services
CEO:
Mr. Kevin Stevenson
Total Employees:
3,361
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 12.81% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF PRA GROUP, INC.(PRAA) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CREDIT SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
36.18
One Month Price Target:
$36.43
Six Month Price Target :
$37.65
Likely Price in One Year's Time:
Ticker:
$39.13
Likely Trading Range Today Under (Normal Volatility)
$36.02
Price Upper limit ($) :
$36.36
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$34.11
This week:
$31.55
This month :
$26.91
Other Primary facts
Market Cap:
1.41B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
38.98M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
32.12%
-17.58%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$45.80
$41.40
$26.56
$30.96
Medium risk (<10%) entry points
Buy Call
Sell Call
$39.97
Buy Put:
Sell Put:
$39.03
$32.38
$33.33
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
PRAA
Sharpe Ratio:
0.88%
Comparison:
PRAA, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -52.90% lower than the industry
& is -61.59% lower than the market/S&P 500 average
Average Returns/Yield of
PRAA
Daily returns:
0.03%
Weekly returns:
0.17%
Monthly returns:
0.67%
Yearly returns:
19.06%
Comparison of returns:
Average annual returns/yield (last 3 years) is -57.94% below industry average
Classification:
PRAA, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.89
Statistical test of Returns:
PRAA has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.81%
Weekly Volatility:
6.27%
Monthly Volatility:
12.55%
Yearly Volatility:
43.46%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.80%
Volatility in last five trading days has been -71.46% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.73%
Weekly VaR:
-12.81%
Monthly VaR:
-25.62%
How Much Can the price of
PRAA
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-22%
Worst case (decline):
-88.74%
This translates to price declining to:
$28.12
This translates to price declining to:
$4.07
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
PRAA is a 80.80% riskier investment compared to the market/S&P 500 & is 54.89% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -14.99% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
PRAA
Beta in relation to market/S&P 500--1.21
Expected beta in 1 year's time:
0.793
Expected beta in 3 year's time:
1.121
Unlevered (debt free) Beta:
0.632
Beta in relation to Nasdaq (XNAS):
0.49
Beta in relation to all global stocks::
0.692
Beta Comparison & Analysis
Beta of competitors/peers::
1.212
Beta is 0.06% higher than peers
Average Industry Beta:
1.332
Beta is -8.97% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
12.85%
Sustainable growth rate is -61.92% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.034
Alpha is -150.64% below industry average alpha yield
Alpha is -219% below the market average
Analysis of Cost of Capital of
PRAA
Equity cost of capital:
0.115
Equity cost of capital is -6.67% below industry mean WACC
Unlevered (without debt) cost of capital:
5.97%
Before-tax cost of debt:
4.46%
After-tax cost of debt:
3.53%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.53%
WACC is -18.58% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$26.86
Revenue growth rate per share of (3Y):
1.05
Annual revenue growth rate is -84.66% below industry average
EPS:
$3.73
Expected Annual growth rate of EPS (3Y):
28.59%
Expected future EPS growth rate is 14.09% higher than the Credit Services industry
Free cash flow (FCF) per share:
$0.70
-
-
Debt per share
$38.46
EBITDA per share
$8.67
Valuation Analysis Today of
PRAA
P/E Ratio:
10.57
P/E Ratio of Competitors/Peers:
12.76
P/E ratio is -17.20% lower than main peers & is -12.95% lower than the industry
Stock price/value with industry average P/E ratio: $45.27
PRAA is -20.08% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.35
Price to sales ratio is -74.09% below the industry mean
P/B (Price to book value ratio):
1.05
Price to free cash flow: 51.47
-
Net income growth rate (3Y):
179.21%
Net income growth rate is 1009.52% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
114.81%
Net debt to equity ratio:
193.03%
Debt to assets ratio:
35.20%
Net debt to assets ratio:
59.19%
Debt-to-asset ratio is -54.84% below industry average
Ability to repay debt:
Interest coverage ratio:
2.91
Interest coverage ratio is -70.35% less than industry average
Looking forward:
Debt growth rate:
0.32%
Annual debt growth is -99% lower than industry average debt growth rate
Debt repayment rate in last quarter: 9.50%
Analysis of Key Statistics
Correlation of price movement with the market:
0.424
Statistical significance of correlation:
PRAA has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.561
Stock price is -24.41% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.561
Correlation of price movement with Nasdaq (^IXIC):
0.009
Covariance of price movement with the market:
0.015
Kurtosis
29.924
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
1.989
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
PRAA
Gross Profit Margin Ratio:
286%
Operating Profit Margin Ratio:
32.12%
Operating profit margin is 10.45% higher than the industry
Net Profit Margin Ratio:
286%
Effective Tax Rate:
20.00%
Effective tax rate is -7.61% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
12.62%
Return on equity (ROE) is -70.24% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.87%
Return on assets (ROA) is -36.15% lower than the industry
Financial Leverage:
1.5x
Current Ratio:
2.59
Current ratio is -55.17% below industry average
Cash Conversion Cycle (days):
1135.9
Cash conversion cycle is 755.92% above industry average
The remaining useful life of property plant & equipment is: 12.3 years
Stock based compensation to net income ratio:
2.36%
In-depth Efficiency Analysis
Revenue generated per employee:
311.5K
Each employee generates -57% less revenue than industry average revenue per employee
EBITDA generated per employee:
100.5K
Each employee generates -76% less EBITDA than industry average revenue per employee
Profit generated per employee:
49.0K
Each employee generates -80% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 7.9K
Each employee generates -113% less free cash flow than industry average revenue per employee
Assets/Capital per employee
243.7K
Each employee generates -113% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
PRAA
LAKELAND FINANCIAL CORPORATION (XNAS:LKFN)
PSACU
VERITEX HOLDINGS, INC. (XNAS:VBTX)
VIRTUS INVESTMENT PARTNERS, INC. (XNAS:VRTS)
NMI HOLDINGS, INC. (XNAS:NMIH)
BANNER CORPORATION (XNAS:BANR)
SEACOAST BANKING CORPORATION OF FLORIDA (XNAS:SBCF)
PATRIA INVESTMENTS LTD. (XNAS:PAX)
Renasant Corporation (XNAS:RNST)
Current Analyst Ratings
Strong buy�8%
Buy�4%
Hold�13%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.05B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
299.09M
747.78M
-
152.79M
152.79M
-
258.78M
411.57M
1.52M
115.98M
15.05M
337.84M
336.21M
164.72M
210.32M
42.07M
164.72M
Statement of Cash Flow
Date:
Period:
3.78M
Differed Income Tax :
7.20M
Stock Based Compensation :
3.89M
Change in Working Capital :
- 37508.00K
Accounts Receivables:
-
Other Working Capital:
141.00K
Other Non-Cash Items:
- 34726.00K
Net Cash Provided by Operating Activities:
- 22744.00K
Investments in PP&E:
- 3744.00K
Net Acquisitions:
-
Purchases of Investments:
- 1521.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
79.09M
-
79.09M
3.36B
-
-
3.44B
109.49M
483.38M
-
93.25M
63.97M
68.85M
818.93M
-
4.26B
6.34M
1.10B
13.74M
-
221.06M
1.33B
1.50B
39.73M
1.58B
-
2.91B
404.00K
1.55B
- 243709.0K
-
March 31, 2022 at 6:00:00 AM
710.66M
1.31B
4.22B
-
2.60B
2.5B
775.00K
130.82M
126.33M
- 157310.00K
-
- 48702.00K
-
93.37M
- 112647.00K
910.00K
- 8152.00K
80.92M
89.07M
- 22744.00K
- 3744.00K
- 26488.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
PRAA
2023
2024
2025
2026
2027
$39.33
$56.70
$61.32
$66.32
$71.72