It's Early, But PRA's Fundamentals Looking Better

It's too soon to sound the "all clear" and much too soon to just assume that PRA Group (NASDAQ:PRAA) will get back to historical levels of productivity and financial success, but there is a stronger base for a positive view now than there has been in some time. PRA still has to get its staffing situation sorted out (and improve productivity), and there are still big challenges in Europe, but the supply situation is looking better, and yields could potentially improve from here.

The "but" is that the shares are up about a third from their lows in the fall. However much of that was short-covering, the reality is that the current valuation reflects what I think is a reasonable recovery scenario. There are still avenues toward higher estimates (improved collections is the key one), but I'd say a mid-$30s price is pretty fair for the time being.

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It's Early, But PRA's Fundamentals Looking Better