The Advisory Board (NASDAQ: ABCO) and PRA Group (NASDAQ:PRAA) are both medical companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Valuation and Earnings

This table compares The Advisory Board and PRA Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Advisory Board $799.15 million 2.72 $120.83 million $2.69 19.83
PRA Group $784.13 million 1.68 $280.49 million $1.64 17.77

PRA Group has higher revenue, but lower earnings than The Advisory Board. PRA Group is trading at a lower price-to-earnings ratio than The Advisory Board, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings for The Advisory Board and PRA Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Advisory Board 1 10 3 0 2.14
PRA Group 0 0 3 0 3.00

The Advisory Board presently has a consensus price target of $51.21, indicating a potential downside of 4.01%. PRA Group has a consensus price target of $38.00, indicating a potential upside of 30.36%. Given PRA Group’s stronger consensus rating and higher probable upside, analysts plainly believe PRA Group is more favorable than The Advisory Board.

Risk & Volatility

The Advisory Board has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500. Comparatively, PRA Group has a beta of 1.5, indicating that its stock price is 50% more volatile than the S&P 500.

Profitability

This table compares The Advisory Board and PRA Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Advisory Board 13.65% 12.69% 3.30%
PRA Group 9.76% 4.69% 1.41%

Summary

The Advisory Board beats PRA Group on 7 of the 11 factors compared between the two stocks.

The Advisory Board Company Profile

The Advisory Board Company is a provider of software and solutions to the healthcare and higher education industries. The Company offers subscription-based membership programs, software and data-enabled services. All of its programs are rooted in best practices and extends across four areas, including Best practices research, Technology, Data-enabled services and Consulting services. The best practices research and insight programs provide the foundation for all of its other programs. The Company offers technology analytics programs anchored by cloud-based software applications that surface performance improvement opportunities to accelerate progress. Through its consulting services, the Company provides on-the-ground support for performance improvement initiatives, as well as best practice professional management of areas of the hospital or medical group. The Company’s data-enabled services are primarily focused in the area of enrollment management.

PRA Group Company Profile

PRA Group, Inc. (PRA Group) is a financial and business services company with operations in the Americas and Europe. The Company’s primary business is the purchase, collection and management of portfolios of nonperforming loans. The Company operates through the account receivables management segment. It also provides fee-based services, such as vehicle location, skip tracing and collateral recovery for auto lenders, government entities and law enforcement; revenue administration, audit and revenue discovery/recovery services for local government entities; class action claims recovery services and purchases; servicing of consumer bankruptcy accounts in the United States, and contingent collections of nonperforming loans in Europe and South America. The Company’s portfolio of nonperforming loans includes a set of accounts that can be categorized by asset type, age and size of account, level of previous collection efforts, payment history, and geography.

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