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In a moment when investors are focused on the health of the consumer, markets are sure to take a close look at the performance of one of the nation's largest collection agencies. Shares of PRA Group (NASDAQ: PRAA) soared 25% at the open Friday after the company reported better-than-expected results and said it sees further opportunities up ahead.

A business reboot is beginning to pay off

PRA is in the business of acquiring and collecting nonperforming loans, doing business both in the United States and Europe. When a loan goes south, a lender will often be willing to sell it for pennies on the dollar, creating an opportunity for a company like PRA that is willing to do the legwork to get the borrower back on schedule.

PRA lost $0.22 per share in the fourth quarter on revenue of $221.42 million, coming in ahead of Wall Street expectations for a $0.37 per share loss on sales of $208 million. The company purchased $1.2 billion worth of loans in 2023, up 36%, with its U.S. business up 84%. The company has been working to revamp its U.S. business, and CEO Vikram Atal said in a statement that work is starting to pay off.

"We delivered strong performance in our European business and worked with speed and intensity to address the shortcomings in our U.S. business. The impact of our cash generating and operational initiatives in our U.S. business -- particularly around activity within call centers, post-judgment legal processes, and offshoring -- have been highly encouraging, and demonstrate that we are on track to transform PRA into a more robust, efficient, and profitable enterprise."

Is PRA a buy heading into 2024?

Atal said the company sees "growing portfolio supply in the U.S., and a stable investment environment in Europe." Collections is one of the more counter-cyclical businesses out there, with more opportunity when the economy goes south. Until rate cuts begin and borrowers have a chance to refinance at better terms, PRA will likely continue to see ample supply.

Of course, when times are tough, it is also harder for borrowers to make payments. The company's work improving operations and, hopefully, collections is the primary reason the stock is surging higher today.

This isn't a business for everyone, but PRA is a reputable operator with a lot of opportunity ahead of it. For those intrigued by the business, PRA is among the best opportunities available in public markets.

Should you invest $1,000 in PRA Group right now?

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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.