PRA Group, Inc. (PRAA) is set to report fourth-quarter and full-year 2014 earnings results on Mar 2, 2015. Last quarter, it posted positive earnings surprise of 0.90%. Let us see how things are shaping up for this announcement.
Factors Affecting the Past Quarter
PRA Group has a strong and diversified portfolio that positions it to generate an improved bottom line. Notably, synergies from acquisitions, particularly those of Aktiv Capital and IVA platform should help the company in enhancing earnings.
However, the competitive accounts receivable management industry, drop in total estimated collections to purchase price ratio and higher interest expenses remain concerns.
Earnings Whispers
Our proven model does not conclusively show that PRA Group is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: PRA Group has an ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.12 per share.
Zacks Rank: PRA Group has a Zacks Rank #3 (Hold) which increases the predictive power of ESP. However, the company's 0.00% ESP makes complicates our prediction.
We caution against Sell-rated stocks (Zacks Rank #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks in the finance sector you may want to consider as our model shows that they have the right combination of elements to post an earnings beat.
Arch Capital Group Ltd. (ACGL) with an Earnings ESP of +0.99% and a Zacks Rank #1 (Strong Buy).
AerCap Holdings N.V. (AER) with an Earnings ESP of +2.86% and a Zacks Rank #2 (Buy).
AmTrust Financial Services, Inc. (AFSI) with an Earnings ESP of +1.49% and a Zacks Rank #2.
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