It’s been tough to stay patient with PRA Group (PRAA),
particularly as management has levered up the business during a time of
declining performance. It does seem, though, that improvements and
investments in the business are finally showing to show up in the
results, and with the longer tail to investments made in legal
collections, I expect ongoing improvements for at least a few quarters.
Valuation
is less compelling after the post-earnings jump. I believe a mid-$30s
fair value is reasonable on the basis of my discounted cash flow,
discounted core earnings, and EV/EBITDA approaches, but that doesn’t
leave exceptional upside from here.
Read more here:
PRA Group Showing Good (And Long Awaited) Progress
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