PROG Holdings Inc. (PRG) is a provider of lease-purchase solutions through more than 30,000 retail partner locations in 46 states and the District of Columbia, including e-commerce merchants. The firm operates in two segments Progressive Leasing and Vive Financial.
The company had a fairly strong second quarter where gross merchandise value for their Progressive Leasing segment grew 25.2% year over year, driven by the continued scaling of large national accounts and increased penetration in e-commerce.
PRG also recently acquired Four Technologies, a Miami-based buy now pay later company that allows consumers to pay for merchandise through 4 interest-free installments.
The company had $138 million in cash as of the end of the second quarter compared to no short-term debt. Management is highly efficient with a return on equity of 28.1%. This has led to a Quality Grade of B in our POWR Ratings system. However, analysts expect earnings to fall 50% year over year in the current quarter.
The stock looks undervalued with a trailing P/E of 11.54 and a forward P/E of 12.76. The stock has been showing bearish momentum since late August as shown in the chart below.
Take a look at the 1-year chart of PRG below with added notations:
PRG has tested the $42 level (green) as support several times over the past few months. The stock has fallen back down to that support again.
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A break of $42 most likely means lower prices for the stock. A trader could enter a short position if the stock were to break below the support, with a protective stop placed above the entry point.
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PRG shares were trading at $42.19 per share on Friday morning, down $0.19 (-0.45%). Year-to-date, PRG has declined -21.68%, versus a 19.21% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing.
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