PRG

PROG Holdings($PRG) Executives Signal Confidence Through Stock Purchases Following Share Price Decline

05/14/2025 21:02

PROG Holdings' top executives have recently been purchasing shares, drawing significant investor attention. On May 12, President Steven Michaels acquired 15,000 shares at $29.03 per share, investing a total of $435,450. The following day, CFO Brian Garner added another 3,500 shares at $28.93 per share, committing an additional $101,255. These executive purchases are particularly noteworthy as they come at a time when PROG Holdings' stock has experienced a substantial decline over the past six months. On February 19, the company released a disappointing forecast for fiscal year 2025, causing the stock to plummet 23.5% in a single day to a seven-month low. At that time, the company projected adjusted earnings per share (EPS) for 2025 between $3.10 and $3.50, significantly below Wall Street analysts' expectations of $3.88. The stock, which had been trading in the $42 range in mid-February, quickly dropped to the $30 range immediately following the forecast announcement and continued to decline through March and April, reaching the $24-26 level. However, it has recently shown modest recovery in May, returning to the $28 range. Against this backdrop, the CEO and CFO purchases suggest that the leadership team believes the current stock price is undervalued. Interestingly, these recent buys stand in stark contrast to the substantial selling by top executives late last year. Between November 7 and 12, 2024, President Michaels sold a total of 73,818 shares (worth approximately $3.5 million), while CFO Garner disposed of 20,484 shares (worth about $1 million) during the same period. At that time, PROG Holdings' stock was trading in the $46-49 range, approximately 70% higher than current levels. This insider trading pattern demonstrates a classic investment strategy of 'selling high and buying low,' and the fact that both the CEO and CFO are following the same pattern reflects their confidence in the company's value and stock direction. Looking at PROG Holdings' recent performance, the company reported adjusted earnings of 90 cents per share for the quarter ended March 31, 2025, with revenue increasing 6.6% year-over-year to $684.09 million. This exceeded analysts' expectations of $678.23 million. Despite this improved performance, the stock has yet to recover from its significant decline. Analysts at Jefferies downgraded PROG Holdings from 'buy' to 'hold' on February 26, lowering their price target from $58 to $29. They cited delayed industry recovery and the company's exposure to struggling retail segments as reasons for the downgrade. Nevertheless, five out of seven brokerages still maintain a 'buy' rating or higher, with a median price target of $40. In the financial technology sector, PROG Holdings provides lease and purchase options, particularly connected to the retail sector, which is sensitive to economic fluctuations. While the U.S. economy has shown strong employment figures and stable consumer spending, inflation and interest rate pressures continue to impact lower-income consumers, affecting the company's business environment. In this context, the recent share purchases by the CEO and CFO can be interpreted as a positive signal that management maintains confidence in the company's long-term value and business model despite short-term challenges. Additionally, key decision-makers are aligning their interests with shareholders by investing in company stock. Wall Street analysts maintain an average 'buy' rating on PROG Holdings, with a median 12-month price target of $40, approximately 40% higher than the current stock price. The recent insider purchases, along with the first-quarter results exceeding expectations, support this positive outlook. However, concerns about the 2025 annual forecast and continued pressure in the retail sector may limit short-term stock recovery. Upcoming quarterly results and additional guidance updates from management will likely be critical factors in determining the stock's direction.

You can receive notifications when news is published.