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PRG: Higher Profit Margins And Buybacks Will Support Measured Earnings Outlook

Regulation And Rising Consumer Caution Will Sink Leasing Prospects

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PRG
AnalystLowTarget
Not Invested
Published 09 May 2025

Update shared on 15 Dec 2025

Fair value Increased 15%
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AnalystLowTarget's Fair Value
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1Y
-30.7%
7D
0.4%

Analysts have raised their price target on PROG Holdings to approximately $31 per share from about $27, reflecting improved expectations for future profitability and valuation multiples, despite slightly higher discount-rate assumptions.

What's in the News

  • PROG Holdings will host an Analyst and Investor Day to outline its strategic vision, key growth drivers, capital allocation priorities, and long term financial objectives (Key Developments).
  • The company raised full year 2025 earnings guidance, tightening the range for net earnings from continuing operations to approximately $124.3 million to $128.8 million and increasing expected diluted EPS from continuing operations to about $3.06 to $3.16, while slightly trimming its revenue outlook (Key Developments).
  • PROG Holdings issued new guidance for the fourth quarter of 2025, projecting total revenues of roughly $575 million to $590 million, net earnings from continuing operations of about $17 million to $24 million, and diluted EPS from continuing operations of $0.47 to $0.57 (Key Developments).
  • The company reported no share repurchases in the latest tranche, but confirmed it has cumulatively repurchased around 27.7 million shares, or roughly 52.8 percent of shares, for about $992.7 million under its ongoing buyback program announced in November 2021 (Key Developments).

Valuation Changes

  • The fair value estimate has risen moderately, from about $27.02 per share to approximately $31.00 per share.
  • The discount rate has increased slightly, from roughly 8.86 percent to about 9.04 percent, reflecting a modestly higher risk or return assumption.
  • The revenue growth outlook has been reduced meaningfully, from around 1.68 percent to approximately 1.24 percent.
  • The net profit margin assumption has improved, rising from about 4.80 percent to roughly 5.41 percent.
  • The future P/E multiple has edged higher, from about 9.33x to approximately 9.99x, indicating a somewhat richer valuation expectation.

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