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…

PROG Holdings Inc. (PRG) 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…

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