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PROG Holdings (PRG)
NYSE:PRG
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PROG Holdings
(NYSE:PRG)
54Neutral
Positive Factors
Earnings
PRG reported 4Q EPS of $0.80, above estimate of $0.75 and consensus of $0.77.
Revenue
Higher-than-expected revenues were driven by better interest and fees on loans.
Negative Factors
Guidance
Initial 2025 guidance is below estimate and consensus, reflecting the impact of Big Lots bankruptcy.
Provision Costs
The miss to our estimate was primarily driven by higher-than-expected provision for leases and loans.
PROG Holdings (PRG) vs. S&P 500 (SPY)
Market Cap
$1.07B
Dividend Yield1.82%
Average Volume (3M)780.49K
Price to Earnings (P/E)5.8
Beta (1Y)1.42
Revenue Growth2.29%
EPS Growth55.85%
CountryUS
Employees1,403
SectorIndustrials
Sector Strength66
IndustryRental & Leasing Services
Share Statistics
EPS (TTM)4.55
Shares Outstanding40,604,576
10 Day Avg. Volume610,140
30 Day Avg. Volume780,493
Financial Highlights & Ratios
PEG Ratio0.10
Price to Book (P/B)N/A
Price to Sales (P/S)0.45
Price to Cash Flow (P/CF)-3.30
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$44.17Price Target Upside67.25% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
PROG Holdings Business Overview & Revenue Model
Company DescriptionPROG Holdings, Inc. (PRG) is a financial technology holding company based in the United States. It primarily operates through its wholly-owned subsidiary, Progressive Leasing, which offers lease-purchase solutions to consumers. The company facilitates transactions between consumers who may not have access to traditional credit and retailers in various sectors, including furniture, appliances, electronics, and other durable goods.
How the Company Makes MoneyPROG Holdings generates revenue primarily through its lease-purchase agreements. The company partners with retailers to provide consumers with the option to lease merchandise over a specified term, usually 12 months, with the flexibility to purchase the item at any point during the lease period. Revenue is earned through initial lease fees, periodic rental payments made by consumers, and additional fees if the consumers choose to purchase the items. The business model relies heavily on partnerships with a wide range of retailers to expand its market reach and make its leasing services available to a larger consumer base. Additionally, PROG Holdings benefits from its proprietary technology platform that streamlines the lease approval and management process, contributing to operational efficiency and customer satisfaction.
PROG Holdings Financial Statement Overview
Summary
PROG Holdings shows a mixed financial performance. Revenue and cash flow have displayed a concerning downward trend, though the company has managed to improve its net profit margin. The balance sheet is strong, with reduced debt and increased equity, offering a solid foundation for future growth. Cash flow stability remains a key challenge.Income Statement
The company experienced a decline in total revenue over the past three years, with a decrease from $2.68 billion in 2021 to $2.41 billion in 2023. Gross profit margin has been under pressure, decreasing from $823.68 million in 2021 to $831.96 million in 2023. However, net profit margin improved significantly in the latest year, reflecting better cost management despite revenue challenges. EBIT and EBITDA margins also show some resilience, indicating operational efficiency.45
Neutral
Balance Sheet
The company's balance sheet shows a strong equity position, with a consistent stockholders' equity increase from $570.46 million in 2022 to $650.28 million in 2023. The equity ratio has improved, indicating a healthier capital structure. Debt levels have been reduced significantly, showcasing financial prudence. However, the total assets have remained relatively flat, indicating limited growth in asset base.60
Neutral
Cash Flow
Operating cash flow has decreased from $204.24 million in 2023 to $138.53 million in 2024, raising concerns about cash generation stability. Free cash flow showed a similar downward trend, but remains positive, suggesting some level of financial flexibility. The operating cash flow to net income ratio indicates that cash flow generation is aligned with reported profitability.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.46B | 2.41B | 2.60B | 2.68B | 2.48B | Gross Profit |
| 2.46B | 831.96M | 807.92M | 823.68M | 607.58M | EBIT |
| 194.90M | 225.63M | 1.92B | 333.53M | 271.76M | EBITDA |
| 194.90M | 1.83B | 185.65M | 333.53M | 271.76M | Net Income Common Stockholders |
| 197.25M | 138.84M | 98.71M | 243.56M | 233.63M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 95.66M | 155.42M | 131.88M | 170.16M | 36.65M | Total Assets |
| 1.51B | 1.49B | 1.49B | 1.62B | 1.32B | Total Debt |
| 655.06M | 608.11M | 612.09M | 615.06M | 79.52M | Net Debt |
| 559.40M | 452.70M | 480.21M | 444.90M | 42.87M | Total Liabilities |
| 863.49M | 899.92M | 921.45M | 942.35M | 331.27M | Stockholders Equity |
| 650.28M | 591.33M | 570.46M | 679.41M | 986.14M |
| Cash Flow | Free Cash Flow | |||
| 130.21M | 194.62M | 232.81M | 236.41M | 391.62M | Operating Cash Flow |
| 138.53M | 204.24M | 242.48M | 245.96M | 455.96M | Investing Cash Flow |
| -79.17M | -38.83M | -53.53M | -82.17M | -114.53M | Financing Cash Flow |
| -119.12M | -141.87M | -227.22M | -30.28M | -362.55M |
PROG Holdings Technical Analysis
Negative
26.41
Price Trends
34.22
Negative
39.63
Negative
40.81
Negative
Market Momentum
-1.78
Negative
33.66
Neutral
51.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRG, the sentiment is Negative. The current price of 26.41 is below the 20-day moving average (MA) of 27.14, below the 50-day MA of 34.22, and below the 200-day MA of 40.81, indicating a bearish trend. The MACD of -1.78 indicates Negative momentum. The RSI at 33.66 is Neutral, neither overbought nor oversold. The STOCH value of 51.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PRG.
PROG Holdings Risk Analysis
PROG Holdings disclosed 47 risk factors in its most recent earnings report. PROG Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
PROG Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Performance Comparison
PRG
PROG Holdings
26.41
-7.50
-22.12%
BBY
Best Buy Co
72.45
-5.76
-7.36%
HZO
Marinemax
22.01
-11.11
-33.54%
PROG Holdings Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -37.83% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive growth in certain segments, such as GMV and asset balances, alongside challenges like higher delinquencies and the impact from Big Lots' bankruptcy. While growth initiatives and technology investments are promising, the immediate financial pressures from these lowlights create a balanced outlook for the company.Highlights
Growth in Progressive Leasing GMV
Progressive Leasing's GMV grew 7.3% to $1.93 billion in 2024 and achieved 9.1% year-over-year GMV growth in Q4, driven by sales, marketing, and technology initiatives.
Increase in Gross Leased Asset Balance
The gross leased asset balance increased by 6.1% in 2024, marking a significant turnaround from a 5.2% decline at the start of the year.
PROG Marketplace Growth
The PROG Marketplace platform nearly tripled its GMV in 2024, exceeding the goal of doubling year-over-year and targeting $75 million in GMV for 2025.
Forre Technologies GMV Growth
Forre Technologies tripled its GMV in 2024, reaching over $300 million, with expectations to more than double GMV again in 2025.
Adjusted EBITDA and Non-GAAP EPS
Q4 adjusted EBITDA increased by 7.7% to $65.7 million, and non-GAAP diluted EPS grew 11.1% to $0.80 per share.
Lowlights
Higher Delinquencies and Write-Offs
Q4 2024 write-offs were 7.9%, slightly above expectations, due to higher delinquencies, particularly among new customer acquisitions.
Impact of Big Lots Bankruptcy
Big Lots, a major retail partner, filed for bankruptcy, leading to a projected flat GMV for Q1 2025 and posing margin headwinds.
Decreased Gross Margin
Progressive Leasing's gross margin was lower in 2024 due to higher delinquencies and a higher percentage of 90-day purchase options.
SG&A Deleverage Expected
A slight SG&A deleverage is expected in 2025 due to decreased revenue from Big Lots' bankruptcy and ongoing investments in marketing and technology.
Company Guidance
During the PROG Holdings Fourth Quarter 2024 Earnings Conference Call, the company provided detailed guidance for 2025, highlighting several key metrics and strategic initiatives. The company expects full-year 2025 gross merchandise volume (GMV) growth in the high single digits, excluding the impact of their major retail partner, Big Lots, which filed for bankruptcy. Despite this headwind, PROG Holdings anticipates consolidated revenue growth in the low to mid-single digits, supported by the anticipated doubling of GMV for their Forre Technologies business. The company aims to maintain portfolio write-offs within a 6% to 8% range, while adjusted EBITDA is projected between $260 million and $280 million. In terms of profitability, the adjusted EBITDA margin for Progressive Leasing is expected to be between 10.9% and 11.2%, reflecting both the loss of Big Lots and continued investments in growth and technology initiatives. Non-GAAP EPS guidance is set at $3.10 to $3.50, assuming a stable macroeconomic environment and no significant shifts in share repurchase activities. The company emphasized its focus on expanding retail partnerships, enhancing customer experiences, leveraging AI for efficiencies, and driving further GMV growth through strategic investments in sales, marketing, and technology.PROG Holdings Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
PROG Holdings Expands Board with New Appointments
Positive
Nov 13, 2024
PROG Holdings, Inc. has expanded its Board of Directors by appointing Robert Julian and Daniela Mielke, both of whom bring extensive experience in consumer retail, e-commerce, digital payments, and fintech. Their expertise is expected to enhance the company’s strategic focus on growth and expansion. As independent directors, they aim to drive consumer engagement and business profitability, aligning with PROG Holdings’ vision for a robust financial future.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.