In a recent evaluation, KeyBanc has adjusted its price target for Prog Holdings (PRG, Financial) from $50 to $45. Despite this downward revision, the firm has maintained an Overweight rating on the stock.
The adjustment comes after better-than-expected first-quarter results, although KeyBanc highlighted that consumer trends showed signs of weakening as the quarter wore on. This is set against a backdrop of a challenging macroeconomic environment, which is introducing significant uncertainties for many businesses.
Nevertheless, KeyBanc views Prog Holdings' valuation as attractive. The stock is currently priced at 7.4 times the projected earnings per share for 2026 and boasts an 18.1% free cash flow yield, suggesting strong potential benefits for investors.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for PROG Holdings Inc (PRG, Financial) is $37.33 with a high estimate of $45.00 and a low estimate of $29.00. The average target implies an upside of 50.96% from the current price of $24.73. More detailed estimate data can be found on the PROG Holdings Inc (PRG) Forecast page.
Based on the consensus recommendation from 7 brokerage firms, PROG Holdings Inc's (PRG, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for PROG Holdings Inc (PRG, Financial) in one year is $38.16, suggesting a upside of 54.31% from the current price of $24.73. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the PROG Holdings Inc (PRG) Summary page.
PRG Key Business Developments
Release Date: April 23, 2025
- Revenue: $684.1 million, a 6.6% increase year over year.
- Adjusted EBITDA: $70.3 million, exceeding the high end of the outlook.
- Non-GAAP EPS: $0.90, surpassing the top end of the outlook.
- Progressive Leasing GMV: $402 million, down 4% from last year.
- Lease Portfolio Balance: Up 6.1% year over year as of December 31, 2024.
- Write-offs: 7.4%, slightly better than expected.
- Gross Margin: 29.3%, down about 112 basis points from last year.
- Cash and Debt: $213.3 million in cash and $600 million in gross debt.
- Share Repurchase: 936,000 shares repurchased at an average price of $27.87 per share.
- Revised 2025 Revenue Outlook: $2.425 billion to $2.5 billion.
- Revised 2025 Adjusted EBITDA Outlook: $245 million to $265 million.
- Revised 2025 Non-GAAP EPS Outlook: $2.90 to $3.30.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue for the first quarter approximated the high end of the company's outlook, with both earnings and non-GAAP diluted EPS exceeding expectations.
- The BNPL platform, Four Technologies, showed strong growth and achieved its first quarter of positive adjusted EBITDA.
- Consolidated revenue increased by 6.6% year over year, driven by a larger lease portfolio and higher 90-day purchase activity.
- The lease portfolio remains healthy, with Q1 write-offs at 7.4%, slightly better than expected.
- The company continues to grow its balance of share with key existing partners and has expanded its active door count by nearly 5% year over year.
Negative Points
- Progressive leasing's GMV for the quarter was 4% below the same period last year, impacted by the loss of a large retail partner due to bankruptcy.
- There was a noticeable slowdown in consumer activity mid-quarter, attributed to economic volatility and evolving trade policy.
- Consumer confidence appears to be negatively impacted, with many shoppers delaying discretionary spending, especially in big-ticket categories.
- The macro environment has deteriorated, with inflation, tariff concerns, and broader uncertainty creating additional pressure on consumer and retail partner channels.
- Approval rates for leases were down year over year, partly due to tightening actions and a shift in application quality.
