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Finance

PROG Holdings (NYSE: PRG) reported third-quarter revenue of $725.8 million, up 25.6%, while adjusted EPS climbed 21.8% to $1.06. Adjusted EBITDA reached $80 million, and management announced plans for a $100 million accelerated share repurchase as its payment businesses expanded.

At the previous $29.61 closing price, PROG carried an estimated $1.18 billion market capitalization and traded around 6.2 times the midpoint of its revised $4.70 to $4.85 annual adjusted EPS forecast. The planned repurchase represents roughly 8.5% of that equity value, although execution remains pending.

Four Technologies is growing much faster than the parent company's core leasing operation. Its revenue more than doubled to $37.2 million, while adjusted EBITDA rose 323% to $11.4 million.

The value you assign to Four could determine whether the six-times multiple adequately reflects this expanding payments business.

Payments Growth Supports Capital Returns

Four's transaction volume climbed 103% to $330.4 million, while consolidated merchandise volume grew 59% to $912 million. PROG also replenished its overall buyback authorization to $500 million and ended the quarter with net leverage of 1.5 times, providing flexibility for planned repurchases.

Credit Pressure Can Offset the Discount

Progressive Leasing's adjusted EBITDA fell 12.3% to $56.5 million, with merchandise write-offs at 8.3% of leasing revenue. Management also reduced annual earnings guidance, reflecting pressure on consumers.

Its $872 million debt burden adds risk if conditions worsen. Unless repayment performance stabilizes, weakness in the core business could absorb gains from Four, reducing your potential upside.

Software

Blackbaud (NASDAQ: BLKB) reported third-quarter revenue of $292.6 million, up 4.1%, while adjusted earnings increased to $1.36 per share from $1.10. Its adjusted operating margin expanded 240 basis points to 32.3%, and management reaffirmed annual guidance despite a sharp market reaction.

GAAP operating income also rose to $60 million from $54.6 million.

At approximately $49.86, Blackbaud carries a market value near $2.25 billion and trades around 9.6 times the midpoint of its $5.15 to $5.25 adjusted EPS forecast. Projected annual free cash flow of $280 million to $290 million implies a yield near 12.7%.

Recurring revenue reached $287 million, representing 98.1% of quarterly sales, while nine-month free cash flow increased 46.7% to $238.3 million. Those results remain meaningful even with subdued sales growth, because cash generation is improving faster than revenue.

Recurring Contracts Support More Cash Generation

Quarterly adjusted EBITDA rose 11.4% to $111.1 million, outpacing revenue growth. Blackbaud repurchased more than 7% of shares outstanding since year-end 2025 and retained $832 million in buyback authorization.

Net leverage declined from 2.7 times in Q1 to 2.3 times in Q3. Nine-month operating cash flow reached $284.2 million.

Debt and Slow Growth Still Matter

GAAP net income slipped to $46.1 million from $47.5 million, while debt remained near $1.04 billion. Adjusted earnings exclude stock-based compensation, and repurchases compete with debt reduction for cash.

Renewal rates and debt repayment matter more to your cash-flow outlook than the size of its buyback authorization.

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Apparel

V.F. Corporation (NYSE: VFC) exceeded its fiscal second-quarter operating profit guidance, delivering $364 million in adjusted operating income excluding Dickies against a $315 million forecast. Gross margin expanded 320 basis points to 55.4%, while net debt declined $1.1 billion, or 20%, from a year earlier.

At about $16.64 per share, V.F. carried a market value near $6.54 billion and traded at roughly 9.7 times trailing free cash flow. Management expects at least $515 million in fiscal 2027 free cash flow, but its normalized baseline of $405 million implies a more modest yield near 6.2%.

The North Face and Timberland each grew revenue 4%, while Altra expanded more than 40%. Vans recorded its first global direct-to-consumer growth in almost five years, although total brand revenue still fell 9.8%. Growth at three other brands means you need not rely solely on a Vans rebound to explain the higher margins.

Profitability Improves Before Sales Recover

Adjusted operating margin excluding Dickies increased 170 basis points to 13.5%, and adjusted operating income exceeded guidance by $49 million.

The company reaffirmed its fiscal 2027 operating margin target near 8% and expects wholesale orders to support Vans later in the year. Debt reduction also provides breathing room for cash generation.

Leverage Still Complicates the Turnaround

Overall quarterly revenue declined 4% to $2.70 billion, and inventories increased 7%. Management expects year-end leverage of 2.6 to 2.9 times adjusted EBITDA, leaving limited flexibility if consumer demand weakens. Vans must deliver sustained sales progress before your confidence in the recovery rests on more than margin gains.

PayPal (NASDAQ: PYPL)

PayPal runs the checkout button you’ve tapped more times than you can count, plus Venmo, the app your friends use to chase you for brunch money. Revenue came in light last quarter while branded checkout kept growing at a crawl, and that became the headline. The fun part sits a few lines lower.

Adjusted earnings per share jumped 8% when management had guided to a small decline, and the trick was simple: PayPal keeps buying back its own stock, so the same profit gets split across fewer shares.

Venmo payment volume is growing in the mid-teens, and debit card spending across both apps is climbing fast. Management raised its full-year adjusted EPS outlook, which puts the stock under 11 times that number. Checkout still needs to wake up, and the holiday quarter will tell you whether it can.

Eastman Chemical (NYSE: EMN)

Eastman makes the plastic in your reusable water bottle, the film sandwiched inside car windshields and the fibers in cigarette filters.

Chemical stocks have spent years in the penalty box thanks to weak demand for housing and big-ticket goods, and Eastman has slid since the summer even as its numbers improved. Back in July, management said third-quarter adjusted earnings per share would approach the second quarter’s level, a big jump from a year ago.

That’s a company telling you the recovery is in motion. Meanwhile, you collect a dividend yielding north of 4.5% from a company that has raised its payout every year for more than a decade.

On the call, listen for the fourth-quarter outlook, because soft demand for discretionary goods is the one thing that could spoil the rebound. Results come out after the close on October 29.

Comcast (NASDAQ: CMCSA)

Comcast owns Xfinity internet and mobile, plus NBCUniversal, Peacock, Universal’s theme parks and Sky in Europe. The market prices it like a broadband company slowly losing customers to cheaper fiber and wireless rivals, and last quarter’s subscriber losses handed the bears fresh material.

Look at the other half of the house. Peacock turned a profit for the second quarter in a row, Universal landed the biggest box-office hit in its history, and the company threw off more than $4 billion of free cash flow in three months.

Then comes the breakup: Comcast plans to spin NBCUniversal and Sky into a separate public company by mid-2027, leaving you with a pure media business and a pure connectivity business. Buybacks are paused until then, so you’re paid to wait instead, with a dividend yielding north of 5% and a single-digit earnings multiple.

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^{This communication is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. Any such offer or solicitation will be made exclusively through the definitive offering documents. All investments involve risk of loss, including the potential loss of principal. Past performance is not a guarantee of future results. Any targeted returns or projections are forward-looking statements, are based on current assumptions, and are not guarantees of future performance. Actual results may differ materially.}

That’s it for today. Hit reply with any value names you want us to dig into next.

Best Regards,
—Noah Zelvis
Undervalued Edge