PRG (Update)

PROG Holdings Inc

Consumer, Finance/Real Estate


Presented:08/11/2021
Price:$45.72
Cap:$3.04B
Current Price:$48.79
Cap:$2.06B

Presented

Date08/11/2021
Price$45.72
Market Cap$3.04B
Ent Value$3.18B
P/E Ratio10.42x
Book Value$15.99
Div Yield0.07%
Shares O/S66.50M
Ave Daily Vol436,862
Short Int4.45%

Current

Price$48.79
Market Cap$2.06B
PROG Holdings, Inc. engages in the provision of lease-purchase solutions. It offers retail sale and lease ownership of furniture, home appliances, consumer electronics, and accessories through its franchised stores and e-commerce platform. PROG Holdings was founded in 1955 and is headquartered in Draper, UT.
Please note, this is an update to Aaron’s Inc (AAN) – Long, which was first presented on 09/17/2020. 

Publicly traded companies mentioned herein: Aaron’s Co Inc/The (AAN), Affirm Holdings Inc (AFRM), Afterpay Ltd (APT AU), Best Buy Co Inc (BBY), GameStop Corp (GME), Lowe’s Cos Inc (LOW), PROG Holdings Inc (PRG)

Highlights

The presenter remains long shares of PROG Holdings Inc (PRG), a financial technology holding company based in Salt Lake City, Utah with three business segments: Progressive Leasing (98% of total revenue), which was spun out of AAN in late 2020 and offers lease-to-own transactions for large ticket items primarily to credit-challenged consumers; Vive Financial, which provides second-look revolving credit products to consumers who may not qualify for traditional prime lending offers; and Four Technologies, which was recently acquired by PRG for $23.5MM, a BNPL platform that is not expected to materially impact consolidated financial results in the near-term but could help to drive growth in the core Progressive business. PRG is a $3B company with ~$3B of revenues, mid-teen% top line growth, ~$400MM of EBITDA, and a net cash position of $88MM. As the company continues to grow, he sees material upside to the Street’s $5.21 2024 EPS estimate, modeling $7 and applying a 12x multiple (vs. the current 10x forward earnings multiple) to reach a price target of $84 per share over the next two years, which would represent 87% upside to the current $45 per share.

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Idea Discussion

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