| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 67.77 | 109 |
| Intrinsic value (DCF) | 11.12 | -66 |
| Graham-Dodd Method | 24.30 | -25 |
| Graham Formula | 47.41 | 46 |
PROG Holdings, Inc. (NYSE: PRG) is a leading omnichannel provider of lease-purchase solutions, catering to underserved and credit-challenged customers in the U.S. The company operates through two key segments: Progressive Leasing and Vive. Progressive Leasing offers flexible lease-purchase options for furniture, appliances, electronics, and other consumer goods through a network of 24,000 retail partners across 49 states and e-commerce platforms. Vive provides second-look credit products, including private-label and branded credit cards, for consumers excluded from traditional prime lending. Formerly known as Aaron's Holdings Company, PROG Holdings rebranded in 2020 to reflect its focus on progressive financial solutions. With a market cap of approximately $1.14 billion, the company serves a critical niche in the rental and leasing services sector, combining fintech innovation with retail partnerships to expand access to essential goods for subprime borrowers.
PROG Holdings presents a compelling investment case due to its strong position in the underserved lease-to-own and subprime credit markets. The company's diversified revenue streams—spanning both physical retail partnerships and digital platforms—provide resilience against economic fluctuations. However, its high beta (1.788) indicates sensitivity to macroeconomic conditions, particularly consumer credit health. With $246.3M in revenue and $197.2M net income (EPS: $4.53), PRG demonstrates profitability, though its $655.1M total debt warrants monitoring. The dividend yield (~1.5% at current prices) adds income appeal. Investors should weigh its niche market dominance against regulatory risks in subprime lending and potential competition from buy-now-pay-later (BNPL) disruptors.
PROG Holdings differentiates itself through a dual-segment approach that combines lease-to-own (Progressive Leasing) and subprime credit (Vive), creating cross-selling opportunities. Its competitive edge lies in: 1) Extensive retail partnerships (24,000+ locations), enabling superior distribution versus online-only competitors; 2) Proprietary underwriting models tailored for non-prime customers, reducing risk exposure; and 3) Omnichannel capabilities bridging in-store and digital experiences. However, the company faces intensifying competition from BNPL providers like Affirm (which targets similar credit-challenged demographics with installment plans) and traditional rent-to-own players expanding digitally. PRG's scale in subprime leasing gives it cost advantages in customer acquisition and risk management, but its reliance on third-party retailers creates dependency risks. The Vive segment's credit products face competition from fintechs leveraging AI-driven underwriting. Regulatory scrutiny of subprime lending practices remains an ongoing sector-wide challenge.