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The market is cheering the start of the rate cut cycle. It felt like it was never going to come and that inflation was going to beat us to death. The numbers have reeled in, thankfully, allowing for the Fed to shift its stance to accommodative policy. That’s good news for the stock market and great news for investors looking for strong earnings track records. One way to dig up these track records is by leaning on the strength of the Zacks Rank.
Stocks in the good grades of our Zacks Rank have the strongest earnings trends. That includes today’s Bull of the Day, PRA Group ((PRAA - Free Report) ). PRA Group is a financial and business services company, engages in the purchase, collection, and management of portfolios of nonperforming loans worldwide. It is involved in the purchase of accounts that are primarily the unpaid obligations of individuals owed to credit originators, which include banks and other types of consumer, retail, and auto finance companies.
The reason for the favorable rank is several analysts have come out and upped the ante on their earnings estimates. Over the last sixty days, three analysts have pushed up their estimates for the current year and next year. The impact to the Zacks Consensus Estimate has been a big one. Current year consensus is up from 70 cents to $1.33 while next year’s number is up from $1.72 to $2.01. That’s on revenue growth of 33% this year and 6% next year.
Image Source: Zacks Investment Research
A quick peek at the Price, Consensus and EPS Surprise Chart on Zacks.com shows some very bullish divergence between earnings estimates and the stock’s price. Estimates bottomed out at the end of last year. The stock did pop up initially after a huge earnings report at the end of the year. That didn’t translate to a rally this year though, and even though the stock has continued to deliver earnings beats, the share price has suffered. That distance between the price and earnings shows me the opportunity.
This is a stock that was trading around $50 at the start of 2022. It’ now less than half that amount. If earnings can continue to move in a positive direction, it’s only a matter of time before the share price keeps up.
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Bull of the Day: PRA Group (PRAA)
The market is cheering the start of the rate cut cycle. It felt like it was never going to come and that inflation was going to beat us to death. The numbers have reeled in, thankfully, allowing for the Fed to shift its stance to accommodative policy. That’s good news for the stock market and great news for investors looking for strong earnings track records. One way to dig up these track records is by leaning on the strength of the Zacks Rank.
Stocks in the good grades of our Zacks Rank have the strongest earnings trends. That includes today’s Bull of the Day, PRA Group ((PRAA - Free Report) ). PRA Group is a financial and business services company, engages in the purchase, collection, and management of portfolios of nonperforming loans worldwide. It is involved in the purchase of accounts that are primarily the unpaid obligations of individuals owed to credit originators, which include banks and other types of consumer, retail, and auto finance companies.
The reason for the favorable rank is several analysts have come out and upped the ante on their earnings estimates. Over the last sixty days, three analysts have pushed up their estimates for the current year and next year. The impact to the Zacks Consensus Estimate has been a big one. Current year consensus is up from 70 cents to $1.33 while next year’s number is up from $1.72 to $2.01. That’s on revenue growth of 33% this year and 6% next year.
Image Source: Zacks Investment Research
A quick peek at the Price, Consensus and EPS Surprise Chart on Zacks.com shows some very bullish divergence between earnings estimates and the stock’s price. Estimates bottomed out at the end of last year. The stock did pop up initially after a huge earnings report at the end of the year. That didn’t translate to a rally this year though, and even though the stock has continued to deliver earnings beats, the share price has suffered. That distance between the price and earnings shows me the opportunity.
This is a stock that was trading around $50 at the start of 2022. It’ now less than half that amount. If earnings can continue to move in a positive direction, it’s only a matter of time before the share price keeps up.