| Snowflake Score | |
|---|---|
| Valuation | 4/6 |
| Future Growth | 4/6 |
| Past Performance | 1/6 |
| Financial Health | 2/6 |
| Dividends | 4/6 |
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
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$41.16 |
| 52 Week High | US$67.76 |
| 52 Week Low | US$41.03 |
| Beta | 1.5 |
| 1 Month Change | -16.49% |
| 3 Month Change | -28.36% |
| 1 Year Change | -14.09% |
| 3 Year Change | 137.23% |
| 5 Year Change | 413.86% |
| Change since IPO | 2,584.35% |
Recent News & Updates
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...
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.
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
| RCII | US Specialty Retail | US 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
| RCII volatility | |
|---|---|
| RCII Average Weekly Movement | 7.9% |
| Specialty Retail Industry Average Movement | 7.5% |
| Market Average Movement | 6.7% |
| 10% most volatile stocks in US Market | 15.6% |
| 10% least volatile stocks in US Market | 2.4% |
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
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1960 | 14,320 | Mitch Fadel | https://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
| RCII fundamental statistics | |
|---|---|
| Market Cap | US$2.72b |
| Earnings (TTM) | US$181.43m |
| Revenue (TTM) | US$4.13b |
15.0x
P/E Ratio0.7x
P/S RatioIs RCII overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| RCII income statement (TTM) | |
|---|---|
| Revenue | US$4.13b |
| Cost of Revenue | US$2.03b |
| Gross Profit | US$2.09b |
| Expenses | US$1.91b |
| Earnings | US$181.43m |
Last Reported Earnings
Sep 30, 2021
Next Earnings Date
n/a
| Earnings per share (EPS) | 2.74 |
| Gross Margin | 50.72% |
| Net Profit Margin | 4.39% |
| Debt/Equity Ratio | 150.1% |
How did RCII perform over the long term?
See historical performance and comparisonDividends
3.3%
Current Dividend Yield38%
Payout RatioValuation
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
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/01/21 23:34 |
| End of Day Share Price | 2022/01/21 00:00 |
| Earnings | 2021/09/30 |
| Annual Earnings | 2020/12/31 |
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.