PRA Group vs Gladstone Investment

This page compares PRA Group Inc and Gladstone Investment Corporation, outlining their business models, financial performance, and market context in clear, neutral terms so readers can understand each organisation. It highlights how they operate within their respective markets and the factors shaping their approaches. Educational content, not financial advice.

Comparison Snapshot

Key Financial Metrics

PRAA

Metric

GAIN

$614.49M

Market Cap

$548.31M

38.38%

Potential Profit

1.18%

Buy

Analyst Rating

Buy

Investment Analysis

PRA Group

PRAA

Pros

PRA Group demonstrated 19% growth in portfolio purchases leading to a record estimated recoverable collections of $7.8 billion.
The company has a relatively low price-to-earnings ratio of 7.40, indicating potentially attractive valuation compared to earnings.
Analysts have an average rating of 'Strong Buy' with a 12-month price target suggesting a significant upside of over 50%.

Considerations

PRA Group’s return on equity is low at 2.87% for the 3-year average, signaling comparatively less efficient use of equity capital.
The stock has recently reached a new 52-week low following an analyst downgrade, indicating concerns about near-term performance.
The company operates with a high beta of 1.54, implying higher volatility risk relative to the market.

Gladstone Investment

GAIN

Pros

Gladstone Investment focuses on acquiring mature lower middle-market companies with strong fundamentals and experienced management.
It provides both equity and debt capital, which increases certainty and speed of transaction closings in its private equity model.
The company benefits from having no partnership end-of-life deadlines, allowing for patient, long-term capital deployment.

Considerations

As a business development company, Gladstone Investment carries exposure to the cyclical risks inherent in middle-market private equity investments.
Its investment concentration on companies with EBITDA between $4 million and $15 million may limit diversification and increase risk.
Gladstone’s return on equity is higher than PRA Group but still modest at about 16.48%, potentially reflecting moderate profitability.

About The Companies

PRA Group (PRAA)

PRA Group Inc (PRAA) is a specialist buyer and collector of non-performing consumer debt. The company purchases portfolios of charged-off loans at a discount and seeks to recover more than the purchase price through collections, settlements and legal recoveries. PRA operates primarily in the US with international operations that provide geographic diversification. Key things for investors to know include sensitivity to consumer credit cycles, regulatory and legal risk in multiple jurisdictions, and the importance of recovery rates, portfolio pricing and cost control to profitability. With a market capitalisation around $548.20M, PRAA is a smaller-cap financial-services company where cash flow visibility and reserve management often drive valuation. Performance can be volatile: collections fluctuate with economic conditions and regulatory change. This summary is general educational information, not personal advice; values can fall as well as rise and past performance is not a guide to future returns.

Gladstone Investment (GAIN)

Gladstone Investment Corporation is a type of company known as a Business Development Company (BDC). It focuses on investing in what are called 'lower middle market' businesses across the United States. Its strategy is twofold. Firstly, it aims to generate current income by providing secured loans to established companies. The interest from these loans is intended to cover expenses and fund regular income distributions to its shareholders. Secondly, it seeks long-term capital growth by taking equity stakes in these same businesses. The goal is that as these companies grow, the value of Gladstone's equity investment will also increase, potentially leading to capital gains. This dual approach of debt and equity allows it to pursue both income and growth, though it's important to remember that returns and distributions are not guaranteed and the value of investments can go down as well as up.

Which Baskets Do They Appear In?

Phoenixes

These remarkable companies have risen from the ashes of bankruptcy or severe financial distress. Our analysts have carefully selected businesses that emerged stronger, leaner, and ready for their second act of growth after successful restructuring.

Published: June 17, 2025

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Which Baskets Do They Appear In?

Phoenixes

Published: June 17, 2025

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Comparison Snapshot