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RCII

Rent-A-CenterNasdaqGS:RCII Stock Report

Last Price

US$41.16

Market Cap

US$2.7b

7D

-9.0%

1Y

-14.1%

Updated

21 Jan, 2022

Data

Company Financials +
RCII fundamental analysis
Snowflake Score
Valuation4/6
Future Growth4/6
Past Performance1/6
Financial Health2/6
Dividends4/6

RCII Stock Overview

Rent-A-Center, Inc., together with its subsidiaries, leases household durable goods to customers on a lease-to-own basis.

Rent-A-Center Competitors

Conn's

NasdaqGS:CONN

US$674.2m

Befesa

XTRA:BFSA

€2.6b

FlexShopper

NasdaqCM:FPAY

US$40.4m

Brand Concepts

NSEI:BCONCEPTS

₹828.1m

Price History & Performance

Summary of all time highs, changes and price drops for Rent-A-Center
Historical stock prices
Current Share PriceUS$41.16
52 Week HighUS$67.76
52 Week LowUS$41.03
Beta1.5
1 Month Change-16.49%
3 Month Change-28.36%
1 Year Change-14.09%
3 Year Change137.23%
5 Year Change413.86%
Change since IPO2,584.35%

Recent News & Updates

Jan 14
Is It Time To Consider Buying Rent-A-Center, Inc. (NASDAQ:RCII)?

Is It Time To Consider Buying Rent-A-Center, Inc. (NASDAQ:RCII)?

While Rent-A-Center, Inc. ( NASDAQ:RCII ) might not be the most widely known stock at the moment, it received a lot of...

Dec 22

Rent-A-Center: Insider Buying And Strong Cash Flow

Shares of Rent-A-Center have fallen 25% since reaching an all-time high in August 2021 and over 10% since a downward revision to its FY21 earnings on November 3rd, 2021. Rising customer delinquencies in its recently bolstered Acima segment - a result of tapering pandemic benefits - were the reasons promulgated by management. With strong cash flow, plenty of retailer opportunities to exploit with Acima, and insider buying, this lease-to-own company merited closer examination. A full investment analysis follows in the paragraphs below.

Oct 18

Rent-A-Center Remains Too Cheap

The company, whilst somewhat cyclical, is benefiting from secular tailwinds. The Acima acquisition is bringing many benefits, like a better decision engine, smoother consumer experience, efficiency gains, growth and synergies. The shares are now below where they were after a very solid Q2.

Shareholder Returns

RCIIUS Specialty RetailUS Market
7D-9.0%-6.8%-6.1%
1Y-14.1%-8.4%4.2%

Return vs Industry: RCII underperformed the US Specialty Retail industry which returned -6% over the past year.

Return vs Market: RCII underperformed the US Market which returned 6.6% over the past year.

Price Volatility

Is RCII's price volatile compared to industry and market?
RCII volatility
RCII Average Weekly Movement7.9%
Specialty Retail Industry Average Movement7.5%
Market Average Movement6.7%
10% most volatile stocks in US Market15.6%
10% least volatile stocks in US Market2.4%

Stable Share Price: RCII is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: RCII's weekly volatility (8%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
196014,320Mitch Fadelhttps://www.rentacenter.com

Rent-A-Center, Inc., together with its subsidiaries, leases household durable goods to customers on a lease-to-own basis. The company operates in four segments: Rent-A-Center Business, Preferred Lease, Mexico, and Franchising. It offers furniture and accessories, appliances, consumer electronics, computers, tablets and smartphones, tools, tires, handbags, and other accessories under rental purchase agreements.

Rent-A-Center Fundamentals Summary

How do Rent-A-Center's earnings and revenue compare to its market cap?
RCII fundamental statistics
Market CapUS$2.72b
Earnings (TTM)US$181.43m
Revenue (TTM)US$4.13b

15.0x

P/E Ratio

0.7x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
RCII income statement (TTM)
RevenueUS$4.13b
Cost of RevenueUS$2.03b
Gross ProfitUS$2.09b
ExpensesUS$1.91b
EarningsUS$181.43m

Last Reported Earnings

Sep 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)2.74
Gross Margin50.72%
Net Profit Margin4.39%
Debt/Equity Ratio150.1%

How did RCII perform over the long term?

See historical performance and comparison

Dividends

3.3%

Current Dividend Yield

38%

Payout Ratio

Valuation

Is Rent-A-Center undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RCII ($41.16) is trading below our estimate of fair value ($172.68)

Significantly Below Fair Value: RCII is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RCII is poor value based on its PE Ratio (15x) compared to the US Specialty Retail industry average (7.9x).

PE vs Market: RCII is good value based on its PE Ratio (15x) compared to the US market (16.7x).


Price to Earnings Growth Ratio

PEG Ratio: RCII is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: RCII is overvalued based on its PB Ratio (3.2x) compared to the US Specialty Retail industry average (2.5x).


Future Growth

How is Rent-A-Center forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

26.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RCII's forecast earnings growth (26.3% per year) is above the savings rate (2%).

Earnings vs Market: RCII's earnings (26.3% per year) are forecast to grow faster than the US market (13.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: RCII's revenue (11.5% per year) is forecast to grow faster than the US market (9.2% per year).

High Growth Revenue: RCII's revenue (11.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if RCII's Return on Equity is forecast to be high in 3 years time


Past Performance

How has Rent-A-Center performed over the past 5 years?

76.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RCII has a large one-off loss of $88.1M impacting its September 30 2021 financial results.

Growing Profit Margin: RCII's current net profit margins (4.4%) are lower than last year (7%).


Past Earnings Growth Analysis

Earnings Trend: RCII has become profitable over the past 5 years, growing earnings by 76.6% per year.

Accelerating Growth: RCII's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: RCII had negative earnings growth (-5.7%) over the past year, making it difficult to compare to the Specialty Retail industry average (151.5%).


Return on Equity

High ROE: Whilst RCII's Return on Equity (21.24%) is high, this metric is skewed due to their high level of debt.


Financial Health

How is Rent-A-Center's financial position?


Financial Position Analysis

Short Term Liabilities: RCII's short term assets ($349.4M) do not cover its short term liabilities ($548.7M).

Long Term Liabilities: RCII's short term assets ($349.4M) do not cover its long term liabilities ($1.7B).


Debt to Equity History and Analysis

Debt Level: RCII's net debt to equity ratio (131.5%) is considered high.

Reducing Debt: RCII's debt to equity ratio has increased from 144% to 150.1% over the past 5 years.

Debt Coverage: RCII's debt is well covered by operating cash flow (20.8%).

Interest Coverage: RCII's interest payments on its debt are well covered by EBIT (6.7x coverage).


Balance Sheet


Dividend

What is Rent-A-Center current dividend yield, its reliability and sustainability?

3.30%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: RCII's dividend (3.3%) is higher than the bottom 25% of dividend payers in the US market (1.36%).

High Dividend: RCII's dividend (3.3%) is low compared to the top 25% of dividend payers in the US market (3.55%).


Stability and Growth of Payments

Stable Dividend: RCII's dividend payments have been volatile in the past 10 years.

Growing Dividend: RCII's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (38.2%), RCII's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: RCII's dividends in 3 years are forecast to be well covered by earnings (16.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.9yrs

Average management tenure


CEO

Mitch Fadel (64 yo)

4yrs

Tenure

US$9,217,950

Compensation

Mr. Mitchell E. Fadel, also known as Mitch, has been Chief Executive Officer of Rent-A-Center, Inc since January 2, 2018. Mr. Fadel served as President of U.S. Pawn at EZCORP, Inc. from August 2015 to Dece...


CEO Compensation Analysis

Compensation vs Market: Mitch's total compensation ($USD9.22M) is above average for companies of similar size in the US market ($USD5.23M).

Compensation vs Earnings: Mitch's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: RCII's management team is considered experienced (3.9 years average tenure).


Board Members

Experienced Board: RCII's board of directors are not considered experienced ( 2.6 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: RCII insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 22%.


Top Shareholders

Company Information

Rent-A-Center, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Rent-A-Center, Inc.
  • Ticker: RCII
  • Exchange: NasdaqGS
  • Founded: 1960
  • Industry: Computer and Electronics Retail
  • Sector: Retail
  • Implied Market Cap: US$2.722b
  • Shares outstanding: 66.14m
  • Website: https://www.rentacenter.com

Number of Employees


Location

  • Rent-A-Center, Inc.
  • 5501 Headquarters Drive
  • Plano
  • Texas
  • 75024
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/01/21 23:34
End of Day Share Price2022/01/21 00:00
Earnings2021/09/30
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.