RCII Stock Overview
Rent-A-Center, Inc., together with its subsidiaries, leases household durable goods to customers on a lease-to-own basis.
Price History & Performance
|Historical stock prices|
|Current Share Price||US$41.16|
|52 Week High||US$67.76|
|52 Week Low||US$41.03|
|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.
|RCII||US Specialty Retail||US Market|
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.
|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
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|
Is RCII overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|RCII income statement (TTM)|
|Cost of Revenue||US$2.03b|
Last Reported Earnings
Sep 30, 2021
Next Earnings Date
|Earnings per share (EPS)||2.74|
|Net Profit Margin||4.39%|
How did RCII perform over the long term?See historical performance and comparison
3.3%Current Dividend Yield
Is Rent-A-Center undervalued compared to its fair value and its price relative to the market?
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).
How is Rent-A-Center forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?
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
How has Rent-A-Center performed over the past 5 years?
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.
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 ($1.7B).
Debt to Equity History and Analysis
Debt Level: RCII's net debt to equity ratio (131.5%) is considered high.
Reducing Debt: RCII's debt to equity ratio has increased from 144% to 150.1% over the past 5 years.
Debt Coverage: RCII's debt is well covered by operating cash flow (20.8%).
Interest Coverage: RCII's interest payments on its debt are well covered by EBIT (6.7x coverage).
What is Rent-A-Center current dividend yield, its reliability and sustainability?
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: RCII's dividend (3.3%) is higher than the bottom 25% of dividend payers in the US market (1.36%).
High Dividend: RCII's dividend (3.3%) is low compared to the top 25% of dividend payers in the US market (3.55%).
Stability and Growth of Payments
Stable Dividend: RCII's dividend payments have been volatile in the past 10 years.
Growing Dividend: RCII's dividend payments have increased over the past 10 years.
Current Payout to Shareholders
Dividend Coverage: With its reasonably low payout ratio (38.2%), RCII's dividend payments are well covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: RCII's dividends in 3 years are forecast to be well covered by earnings (16.8% payout ratio).
How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Mitch Fadel (64 yo)
Mr. Mitchell E. Fadel, also known as Mitch, has been Chief Executive Officer of Rent-A-Center, Inc since January 2, 2018. Mr. Fadel served as President of U.S. Pawn at EZCORP, Inc. from August 2015 to Dece...
CEO Compensation Analysis
Compensation vs Market: Mitch's total compensation ($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.
Experienced Management: RCII's management team is considered experienced (3.9 years average tenure).
Experienced Board: RCII's board of directors are not considered experienced ( 2.6 years average tenure), which suggests a new board.
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
Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 22%.
Rent-A-Center, Inc.'s employee growth, exchange listings and data sources
- 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
- Rent-A-Center, Inc.
- 5501 Headquarters Drive
- United States
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|
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.