Citizens JMP Slashes PT on PRA Group (PRAA) to $23, Keeps an Outperform Rating

PRA Group, Inc. (NASDAQ:PRAA) is one of the best cheap stocks with huge upside potential. On May 6, Citizens JMP lowered the firm’s price target on PRA Group, Inc. (NASDAQ:PRAA) to $23 from $30, keeping an Outperform rating on the shares.

A senior executive in a board room with company logos and charts in the background.

The firm reasoned that the company’s positive directional and operational trends in fiscal Q1 2025 were very similar to its operations over the past year. This includes the considerable strength in Europe, strong purchase volumes, improving margins, double-digit collections, and cash earnings growth.

However, the firm also told investors in a research note that the lower-than-expected US collections resulted in a material earnings shortfall. Citizens JMP still believes that PRA Group, Inc. (NASDAQ:PRAA) is enjoying a “sweet spot” in the purchasing and collections cycle, which is characterized by stable employment and collections backdrop, increased supply of charge-offs, excess funding, and weakened competition overseas.

PRA Group, Inc. (NASDAQ:PRAA) is involved in the purchase, collection, and management of portfolios of nonperforming loans in two broad categories: Core and Insolvency. The company also provides fee-based services on class action claims recoveries.

While we acknowledge the potential of PRAA to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than XXXX and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.