Amid Intense Macro Uncertainty, PRA Group Executing Well

To at least some extent, the Covid-19 outbreak in North America and Europe is an “all bets are off” event for PRA Group (PRAA) that massively complicates modeling over the next year or two. It’s pointless to attempt to collect on debts incurred by people who have no income, and there is still significant uncertainty as to whether there will be additional shelter-in-place orders around the country and when the country will be back to “business as usual”.

It’s not completely accurate to say that PRA Group can just hunker down and wait for conditions to improve – there are ongoing costs to operate the business – but the company’s receivables don’t expire to any meaningful extent. Sooner or later, people will be able to pay again and although Covid-19 is going to limit the company’s near-term earnings potential, the longer-term outlook is still fairly good, particularly so given the progress made in building up the company’s digital and legal collections capabilities.

Click here for more:
Amid Intense Macro Uncertainty, PRA Group Executing Well