PROG Holdings (PRG) Stock Forecast & Price Target

PROG Holdings Inc. has demonstrated impressive financial momentum, with Four's quarterly gross merchandise value (GMV) and revenue increasing year-over-year by an average of 198% and 382%, respectively, reflecting strong demand and effective expansion strategies. The company's leasing segment anticipates improved margins driven by increased scale, repeat customers, and better loss rates, while the buy now, pay later (BNPL) segment is projected to exhibit robust growth, with a GMV annual run-rate reaching $652 million. Additionally, the initiative to develop its platform companies is expected to enhance performance by driving growth in both the core leasing business and new acquisitions, positioning PROG for a positive re-rating in market valuation.

PROG Holdings Inc faces significant challenges, primarily due to the loss of a key retail partner, which has negatively impacted Gross Merchandise Volume (GMV), revenue, and overall profitability. The company's decision to implement tighter underwriting standards in response to weak consumer spending on larger items further compounds the issue, especially following the bankruptcy of Big Lots, Inc., which resulted in a notable $160 million loss in annual GMV. Consequently, the ongoing pressures in the leasing segment, combined with deteriorating consumer credit conditions, are anticipated to lead to continued headwinds for the core lease-to-own business, negatively influencing future performance.