Shares of PRA Group Inc (PRAA) plummeted 31.38% in pre-market trading on Tuesday, hitting their lowest level since November 2023. The steep decline comes after the debt buyer reported first-quarter profits that fell significantly short of Wall Street expectations, marking its first earnings miss in about two years.

PRA Group's CEO Vikram Atal attributed the disappointing results to a shortfall in cash collections during the quarter, which failed to meet the company's internal models. "Historically, our first quarter cash collections in the U.S. have experienced seasonality increases, typically driven by consumer tax refunds, that didn't materialize this quarter to the extent that we modeled, resulting in lower profitability compared to prior quarters," Atal explained.

Adding to investor concerns, PRA Group also lowered its outlook for return on average tangible equity, a key profitability metric. The company now expects this measure to be below its previous target of about 12% for 2025. As of the previous close, PRA Group's stock was already down 8.1% year-to-date, and this latest setback is likely to put further pressure on the company's market performance.