Friday - BTIG has initiated coverage on PROG Holdings (NYSE:PRG), the parent company of Progressive Leasing, with a Neutral rating. The firm highlighted the company's stable credit trends and recent growth in Gross Merchandise Volume (GMV), noting two consecutive quarters of GMV increase. The analysis pointed out Progressive's strategic focus on partnering with enterprise merchants, such as large big-box retailers, which is seen as a key differentiator in the virtual Lease To Own (LTO) market.
According to BTIG, Progressive Leasing's emphasis on large retailers has resulted in successful collaborations, setting it apart from competitors that typically target smaller merchants. The firm expressed confidence in Progressive's potential to capture more market share and benefit from macroeconomic trends that could accelerate growth.
The analyst remarked on the broader retail environment, which has been challenging, suggesting that large retailers have a greater incentive to partner with companies like Progressive. This is especially relevant as other point-of-sale financing providers have reduced their activities with near- and non-prime consumers.
Progressive Leasing's model allows customers to acquire goods through a lease program, offering an alternative to traditional financing, particularly for those with less access to credit. BTIG's neutral stance reflects a cautious optimism, recognizing the company's solid positioning yet acknowledging the slow pace of top-line growth.
The firm's analysis did not include a price target for PROG Holdings' shares but provided an outlook that indicates a watchful approach to the company's trajectory in the competitive LTO space.
In other recent news, PROG Holdings has been making notable strides in its financial performance. The company's Q1 2024 results surpassed both revenue and earnings forecasts, leading to a subsequent upward revision of their full-year outlook.
This robust performance was recognized by Loop Capital, which adjusted its price target on PROG Holdings from $31 to $35, maintaining a Hold rating. The firm acknowledged PROG Holdings' strong performance in managing operations amidst challenging market conditions.
In a similar vein, TD (TSX:TD) Cowen also adjusted its outlook on PROG Holdings, increasing the price target to $40.00 from the previous $38.00, while reaffirming a Buy rating on the stock. This revision followed the company's recent financial performance, which exceeded analyst expectations. The firm's analysis suggests that PROG Holdings is managing its lending and leasing operations effectively, particularly in controlling expenses and optimizing revenue streams.
InvestingPro Insights
Consistent with BTIG's initiation of coverage on PROG Holdings, InvestingPro data provides additional context to the company's financial performance. With a market capitalization of $1.57 billion and a P/E ratio of 14.45, PROG Holdings appears to be trading at a premium relative to its near-term earnings growth, as indicated by its PEG ratio of 4.4. Despite a slight decline in revenue growth over the last twelve months as of Q1 2024, with a -5.8% change, the company maintains a strong gross profit margin of 34.34%. Importantly, the company's liquid assets surpass short-term obligations, reflecting a solid liquidity position.
InvestingPro Tips highlight that management has been actively repurchasing shares, which can signal confidence in the company's future prospects. Additionally, three analysts have revised their earnings upwards for the upcoming period, suggesting potential for positive developments in the company's financial results. Notably, PROG has delivered a robust return over the last three months, with a 16.57% total price return, and analysts predict the company will be profitable this year.
For investors seeking a deeper analysis, there are additional InvestingPro Tips available for PROG Holdings at https://www.investing.com/pro/PRG. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and discover more insights that could inform your investment decisions.
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