PROG Holdings, Inc. (PRG) | Investment Case

1. Company Snapshot

1.a. Company Description

PROG Holdings, Inc.operates as an omnichannel provider of lease-purchase solutions to underserved and credit-challenged customers.It operates in two segments, Progressive Leasing and Vive.

The Progressive Leasing segment offers lease-purchase solutions to customers for various merchandize in the furniture, appliances, electronics, jewelry, mobile phones and accessories, mattresses, and automobile electronics and accessories markets through point-of-sale and e-commerce retail partners, as well in-store, mobile, and online solutions.The Vive segment provides second-look and revolving credit products to customers that may not qualify for traditional prime lending through private label and Vive-branded credit cards.It offers lease-purchase solutions through approximately 24,000 third-party point-of-sale partner locations and e-commerce websites in 49 states and the District of Columbia.

The company was formerly known as Aaron's Holdings Company, Inc.and changed its name to PROG Holdings, Inc.in December 2020.

PROG Holdings, Inc.was founded in 1955 and is based in Draper, Utah.

Show Full description

1.b. Last Insights on PRG

PROG Holdings, Inc.'s recent performance was negatively impacted by the sale of its Vive Financial credit card receivables portfolio to Atlanticus Holdings Corporation. This strategic move aims to improve capital efficiency and profitability. However, TD Cowen's lowered price target from $38.00 to $37.00 may have offset some positivity. The company's Q3 2025 earnings beat, with quarterly earnings of $0.9 per share, exceeded expectations. Additionally, the declared quarterly cash dividend of $0.13 per share and Yousif Capital Management LLC's increased stake in the company may provide support.

1.c. Company Highlights

Last Price	29.33
Change Percentage	-0.74%
Open	30.24
Previous Close	29.55
Market Cap ( Millions)	1160
Volume	27562
Year High	48.82
Year Low	23.5
M A 50	29.92
M A 200	29.78

FCF Yield	25.49%
Dividend Yield	1.77%
ROE	24.49%
Debt / Equity	0.00%
Net Debt / EBIDTA	-19.97%
Price To Book	1.66
Price Earnings Ratio	7.11
Price To FCF	3.92
Price To sales	0.61
EV / EBITDA	0.59

2. PROG Holdings' Q3 2025 Earnings: A Strong Performance Amidst Challenges

PROG Holdings reported a non-GAAP diluted EPS of $0.90, significantly exceeding the outlook range of $0.70 to $0.75 per share. Revenue was $590.1 million, a slight decline from the same period last year, driven by the impact of the Big Lots bankruptcy and a smaller portfolio entering the quarter. However, this decline was offset by triple-digit revenue growth from four Technologies, the company's BNPL platform. The Progressive Leasing segment saw a 10% year-over-year decline in GMV to $410.9 million, but underlying performance was stronger, with mid-single-digit growth excluding the Big Lots impact and intentional tightening of lease approvals.

Publication Date: Dec -02

                                    📋 Highlights
                                    Non-GAAP EPS Exceeds Outlook:
                                                Achieved $0.90 per share, surpassing the $0.70-$0.75 guidance range.
four Technologies BNPL Growth:
                                                Delivered 160% YoY active shoppers and $11.1M adjusted EBITDA (23% margin) in Q3 2025.
Vive Financial Divestiture:
                                                Generated $150M proceeds, improving balance sheet liquidity and reducing net leverage to 1.1x.
Progressive Leasing Segment:
                                                GMV declined 10% YoY to $410.9M, but underlying growth was mid-single digits excluding Big Lots impact.
2025 Full-Year Outlook:
                                                Revised to $2.41B-$2.435B revenue and $3.35-$3.45 non-GAAP EPS, driven by improved capital efficiency.

                                

Revenue and Margin Analysis

The company's revenue decline was largely due to the Big Lots bankruptcy, but the growth from four Technologies helped mitigate this impact. The adjusted EBITDA margin for four Technologies was 23%, indicating a strong profitability profile. The sale of the Vive Financial credit card receivables portfolio to Atlantica Holdings Corporation is expected to enhance the company's profitability profile and position it to deploy capital more effectively.

Capital Allocation and Dividend

PROG Holdings' capital allocation priorities remain unchanged, focusing on investing in growth initiatives, strategic M&A, and returning excess cash to shareholders through share repurchases and dividends. A quarterly cash dividend of $3 per share was paid, and the company maintained ample liquidity with no borrowings outstanding on their $350 million revolver.

Valuation and Outlook

With a P/E Ratio of 7.03 and an EV/EBITDA of 0.58, the market appears to have a relatively conservative view of the company's prospects. However, the company's strong execution across the business, improved portfolio performance, and successful strategic divestiture of a portfolio business are expected to drive growth. Analysts estimate next year's revenue growth at 0.7%, but the company's revised 2025 full-year outlook suggests improved capital efficiency and profitability.

BNPL Business Growth

The company's BNPL platform, four Technologies, delivered its eighth consecutive quarter of triple-digit GMV and revenue growth, with an average purchase frequency of approximately five transactions per quarter and over 160% growth in active shoppers year-over-year. The business generated $11.1 million in adjusted EBITDA through Q3 2025, representing a 23% margin on revenue. The company expects EBITDA margin improvement over the next several years as the business scales.

3. NewsRoom

PROG Holdings, Inc. (PRG) M&A Call Transcript

Dec -02

Source: seekingalpha.com

PROG Holdings to Acquire Purchasing Power

Dec -01

Source: businesswire.com

PROG: Buy Now, Pay Later Segment May Power P/E Rerate.

Nov -27

Source: seekingalpha.com

Connor Clark & Lunn Investment Management Ltd. Invests $1.53 Million in Aaron’s Holdings Company, Inc. $PRG

Nov -17

Source: defenseworld.net

PROG Holdings, Inc. Declares Dividend

Nov -06

Source: businesswire.com

Yousif Capital Management LLC Purchases 390 Shares of Aaron’s Holdings Company, Inc. $PRG

Oct -24

Source: defenseworld.net

Aaron’s (NYSE:PRG) Stock Price Down 5.7% on Analyst Downgrade

Oct -24

Source: defenseworld.net

Aaron’s (NYSE:PRG) Trading Up 4.7% Following Strong Earnings

Oct -23

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.99%)

6. Segments

Progressive Leasing

Expected Growth: 2.0%

Progressive Leasing's 2.0% growth is driven by increasing adoption of lease-to-own solutions, expansion into new retail partners, and strategic investments in e-commerce and digital capabilities. Additionally, the company's focus on providing affordable payment options and its ability to reach underserved consumers contribute to its growth momentum.

Vive

Expected Growth: 1.8%

Vive's 1.8% growth is driven by increasing adoption of point-of-sale payment solutions, expansion into new markets, and strategic partnerships. Additionally, the rise of omnichannel commerce and growing demand for digital payment options contribute to Vive's growth. Furthermore, PROG Holdings' diversified revenue streams and cost savings initiatives also support Vive's growth momentum.

Other

Expected Growth: 1.5%

PROG Holdings, Inc.'s 1.5% growth in 'Other' segment is driven by increasing adoption of its e-commerce solutions, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digital transformation, cost savings initiatives, and investments in emerging technologies have contributed to this growth.

7. Detailed Products

Progressive Leasing

A lease-to-own solution that allows customers to lease merchandise over time, with the option to purchase at any time.

Vive Financial

A provider of consumer financing solutions, offering credit products and services to underserved consumers.

PROG Holdings' e-commerce platform

A platform that enables customers to shop online and have products shipped directly to their doorstep.

PROG Holdings' retail partnerships

Partnerships with retailers to offer lease-to-own and financing solutions to customers at the point of sale.

8. PROG Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

PROG Holdings, Inc. operates in a competitive industry with various alternatives available to customers, which moderately threatens the company's market share.

Bargaining Power Of Customers

PROG Holdings, Inc. has a large customer base, but the concentration of customers is relatively low, giving customers significant bargaining power.

Bargaining Power Of Suppliers

PROG Holdings, Inc. has a diverse supplier base, reducing the bargaining power of individual suppliers, and the company's scale of operations also gives it negotiating power.

Threat Of New Entrants

The industry in which PROG Holdings, Inc. operates has high barriers to entry, including significant capital requirements and regulatory hurdles, making it difficult for new entrants to join the market.

Intensity Of Rivalry

The industry in which PROG Holdings, Inc. operates is highly competitive, with many established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	50.70%
Debt Cost	6.83%
Equity Weight	49.30%
Equity Cost	14.13%
WACC	10.43%
Leverage	102.84%

11. Quality Control: PROG Holdings, Inc. passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

H&E Equipment Services

A-Score: 5.4/10

Value: 3.3

Growth: 6.2

Quality: 5.8

Yield: 3.0

Momentum: 9.5

Volatility: 4.3

1-Year Total Return ->

PROG Holdings

A-Score: 4.8/10

Value: 8.3

Growth: 5.8

Quality: 6.9

Yield: 2.0

Momentum: 1.5

Volatility: 4.3

1-Year Total Return ->

Custom Truck One Source

A-Score: 4.7/10

Value: 7.2

Growth: 4.3

Quality: 4.0

Yield: 0.0

Momentum: 9.5

Volatility: 3.3

1-Year Total Return ->

Willis Lease Finance

A-Score: 4.6/10

Value: 7.8

Growth: 7.6

Quality: 5.0

Yield: 1.0

Momentum: 2.0

Volatility: 4.3

1-Year Total Return ->

Hertz

A-Score: 3.9/10

Value: 8.5

Growth: 2.0

Quality: 1.9

Yield: 0.0

Momentum: 9.5

Volatility: 1.3

1-Year Total Return ->

FlexShopper

A-Score: 3.0/10

Value: 9.6

Growth: 3.1

Quality: 4.9

Yield: 0.0

Momentum: 0.5

Volatility: 0.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-7.63%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

10.43%

PROG Holdings, Inc. - US74319R1014

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on PRG

1.c. Company Highlights

Better Quality

Average Yield

Average Growth

Earnings Beats

Revenues Beats

Average Quality

Fairly Valued

Medium Volatility

Stable Momentum

Revenues Miss

Cheaper

Weak Momentum

2. PROG Holdings' Q3 2025 Earnings: A Strong Performance Amidst Challenges

Revenue and Margin Analysis

Capital Allocation and Dividend

Valuation and Outlook

BNPL Business Growth

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.99%)

6. Segments

Progressive Leasing

Expected Growth: 2.0%

Vive

Expected Growth: 1.8%

Other

Expected Growth: 1.5%

7. Detailed Products

Progressive Leasing

Vive Financial

PROG Holdings' e-commerce platform

PROG Holdings' retail partnerships

8. PROG Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: PROG Holdings, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

29.33$

Current Price

29.33$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA