Is PROG Holdings' (PRG) Improved Profit Outlook Offsetting Concerns Over Weaker Revenue Guidance?

• PROG Holdings, Inc. recently raised its full-year 2025 earnings guidance, now expecting net earnings from continuing operations between US$124.3 million and US$128.8 million and diluted EPS between US$3.06 and US$3.16, even as it lowered its revenue forecast to a range of US$2.41 billion to US$2.44 billion.
• This shift in outlook arrived after the company reported a year-over-year decrease in third quarter sales and net income, highlighting management’s confidence in improved profitability despite weaker recent results.
• We'll explore how PROG Holdings' raised profit guidance, amid softer quarterly results, may influence its long-term investment narrative and outlook.

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PROG Holdings Investment Narrative Recap

To be a shareholder in PROG Holdings, you'd need to believe in the company's ability to grow earnings through operational efficiency and increased profitability, even when top-line revenue growth is modest or under pressure. The raised 2025 earnings outlook, despite lowered revenue forecasts, may support confidence in short-term margin improvement. However, persistent weakness in core leasing demand and growing competition in Buy Now, Pay Later remain significant risks and the most important near-term catalyst continues to be any clear rebound in consumer transaction volumes, neither of which are immediately resolved by this latest news. Among the recent announcements, PROG Holdings' updated earnings guidance is the most relevant. The company now projects higher net income and diluted EPS for 2025, counterbalancing a tempered revenue outlook. This suggests management's focus on margin preservation could temporarily offset some risk from softer sales, but it does not materially change concerns over the impact of subdued demand in core product lines. In contrast, investors also need to be mindful of the ongoing softness in leasing demand which could...

Read the full narrative on PROG Holdings (it's free!)

PROG Holdings' outlook forecasts $2.7 billion in revenue and $141.4 million in earnings by 2028. This assumes annual revenue growth of 2.5% but a decrease in earnings of $73.3 million from the current earnings of $214.7 million.

Uncover how PROG Holdings' forecasts yield a $38.57 fair value, a 22% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members have assigned fair value estimates for PROG Holdings that span from US$38.57 to an outlier high of US$9,999, reflecting four distinct viewpoints. While management points to improved profitability in its revised guidance, ongoing competitive pressures in the Buy Now, Pay Later segment may influence future results, and your outlook could differ widely from others in the market.

Explore 4 other fair value estimates on PROG Holdings - why the stock might be a potential multi-bagger!

Build Your Own PROG Holdings Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your PROG Holdings research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free PROG Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate PROG Holdings' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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