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

The company's CEO, Vikram Atal, attributed the poor performance to a shortfall in cash collections during the reported quarter relative to PRA Group'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 revised its outlook, projecting a lower return on average tangible equity for 2025 than its previous target of about 12%. This key profitability metric is closely watched by investors. The downward revision, coupled with the earnings miss, has prompted a significant sell-off in the stock. As of the previous close, PRA Group's stock was already down 8.1% year-to-date, and today's plummet further exacerbates its poor performance in 2025. Despite the negative news, two out of four brokerages maintain a "buy" or higher rating on the stock, with two others holding a "hold" rating. The median price target stands at $23, according to data compiled by LSEG.