NYSE:AAN

Stock Analysis Report

Executive Summary

Aaron's, Inc. operates as an omnichannel provider of lease-purchase solutions to underserved and credit-challenged customers.


Snowflake Analysis

High growth potential with adequate balance sheet.


Similar Companies

Share Price & News

How has Aaron's's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AAN's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

35.6%

AAN

15.7%

US Specialty Retail

9.4%

US Market


1 Year Return

-52.5%

AAN

-20.9%

US Specialty Retail

-6.8%

US Market

Return vs Industry: AAN underperformed the US Specialty Retail industry which returned -25.2% over the past year.

Return vs Market: AAN underperformed the US Market which returned -10% over the past year.


Shareholder returns

AANIndustryMarket
7 Day35.6%15.7%9.4%
30 Day-16.3%-13.6%-3.9%
90 Day-56.3%-26.3%-16.5%
1 Year-52.3%-52.5%-19.7%-20.9%-4.8%-6.8%
3 Year-16.2%-17.0%9.4%4.0%23.4%15.2%
5 Year-9.1%-10.6%8.8%0.1%41.3%25.7%

Price Volatility Vs. Market

How volatile is Aaron's's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Aaron's 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: AAN ($22.88) is trading below our estimate of fair value ($86.65)

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


Price To Earnings Ratio

PE vs Industry: AAN is poor value based on its PE Ratio (48.9x) compared to the Specialty Retail industry average (7.5x).

PE vs Market: AAN is poor value based on its PE Ratio (48.9x) compared to the US market (13x).


Price to Earnings Growth Ratio

PEG Ratio: AAN is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: AAN is overvalued based on its PB Ratio (0.9x) compared to the US Specialty Retail industry average (0.8x).


Next Steps

Future Growth

How is Aaron's forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

31.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AAN's forecast earnings growth (30.9% per year) is above the savings rate (1.7%).

Earnings vs Market: AAN's earnings (30.9% per year) are forecast to grow faster than the US market (13.3% per year).

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

Revenue vs Market: AAN's revenue (7.5% per year) is forecast to grow faster than the US market (7% per year).

High Growth Revenue: AAN's revenue (7.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AAN's Return on Equity is forecast to be high in 3 years time (21%)


Next Steps

Past Performance

How has Aaron's performed over the past 5 years?

13.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AAN has a large one-off loss of $279.5M impacting its December 31 2019 financial results.

Growing Profit Margin: AAN's current net profit margins (0.8%) are lower than last year (5.1%).


Past Earnings Growth Analysis

Earnings Trend: AAN's earnings have grown by 13.1% per year over the past 5 years.

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

Earnings vs Industry: AAN had negative earnings growth (-84%) over the past year, making it difficult to compare to the Specialty Retail industry average (6.7%).


Return on Equity

High ROE: AAN's Return on Equity (1.8%) is considered low.


Next Steps

Financial Health

How is Aaron's's financial position?


Financial Position Analysis

Short Term Liabilities: AAN's short term assets ($351.4M) do not cover its short term liabilities ($639.1M).

Long Term Liabilities: AAN's short term assets ($351.4M) do not cover its long term liabilities ($921.4M).


Debt to Equity History and Analysis

Debt Level: AAN's debt to equity ratio (19.5%) is considered satisfactory.

Reducing Debt: AAN's debt to equity ratio has reduced from 48.3% to 19.5% over the past 5 years.

Debt Coverage: AAN's debt is well covered by operating cash flow (93.7%).

Interest Coverage: AAN's interest payments on its debt are well covered by EBIT (25.4x coverage).


Balance Sheet


Next Steps

Dividend

What is Aaron's's current dividend yield, its reliability and sustainability?

0.63%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: AAN's dividend (0.7%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.93%).

High Dividend: AAN's dividend (0.7%) is low compared to the top 25% of dividend payers in the US market (5.46%).


Stability and Growth of Payments

Stable Dividend: AAN is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: AAN is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: AAN is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of AAN's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

3.6yrs

Average management tenure


CEO

John Robinson (47yo)

5.42s

Tenure

US$7,152,038

Compensation

Mr. John W. Robinson, III, has been the Chief Executive Officer of Aaron's, Inc. since November 10, 2014 and has been its President since February 2016. Mr. Robinson served as an Executive Vice President o ...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD7.15M) is above average for companies of similar size in the US market ($USD4.67M).

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


Leadership Team

NamePositionTenureCompensationOwnership
John Robinson
President5.42yrsUS$7.15m0.46% $7.8m
Steven Michaels
CFO & President of Strategic Operations4.17yrsUS$2.73m0.10% $1.7m
Douglas Lindsay
President of Sales & Lease Ownership0.50yrUS$2.61m0.084% $1.4m
Ryan Woodley
Chief Executive Officer of Progressive Finance Holdings LLC5.25yrsUS$3.66m0.15% $2.5m
Curtis Doman
Chief Product Officer & Director4.67yrsUS$2.43m0.29% $4.8m
Robert Loudermilk
Founder & Chairman Emeritus7.58yrsUS$3.26mno data
Trevor Thatcher
Senior VP of Operations0.42yrno datano data
Cory Voglesonger
Vice President of Technology Strategy & Innovation3.08yrsno datano data
John Trainor
Chief Information Officer & Senior VP of Omni-Channel9.42yrsno datano data
Michael Dickerson
Vice President of Corporate Communications & Investor Relations1.58yrsno datano data

3.6yrs

Average Tenure

47yo

Average Age

Experienced Management: AAN's management team is considered experienced (3.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
John Robinson
President5.42yrsUS$7.15m0.46% $7.8m
Curtis Doman
Chief Product Officer & Director4.67yrsUS$2.43m0.29% $4.8m
Robert Loudermilk
Founder & Chairman Emeritus7.58yrsUS$3.26mno data
Kelly Barrett
Independent Director0.92yrno data0.0030% $50.5k
Douglas Curling
Independent Director4.25yrsUS$215.00k0.017% $278.1k
Hubert Harris
Independent Director7.67yrsUS$205.00k0.029% $492.4k
Ray Robinson
Independent Chairman of the Board6yrsUS$300.00k0.037% $625.2k
Cynthia Day
Independent Director8.5yrsUS$220.00k0.026% $441.9k
Kathy Betty
Independent Director7.67yrsUS$205.00k0.052% $884.4k
Walter Ehmer
Independent Director3.92yrsUS$200.00k0.014% $228.8k

5.7yrs

Average Tenure

59yo

Average Age

Experienced Board: AAN's board of directors are considered experienced (5.7 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Aaron's, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Aaron's, Inc.
  • Ticker: AAN
  • Exchange: NYSE
  • Founded: 1955
  • Industry: Homefurnishing Retail
  • Sector: Retail
  • Market Cap: US$1.685b
  • Shares outstanding: 66.74m
  • Website: https://www.aarons.com

Number of Employees


Location

  • Aaron's, Inc.
  • 400 Galleria Parkway SE
  • Suite 300
  • Atlanta
  • Georgia
  • 30339-3182
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AANNYSE (New York Stock Exchange)YesCommon StockUSUSDNov 1982
AZDADB (Deutsche Boerse AG)YesCommon StockDEEURNov 1982

Biography

Aaron's, Inc. operates as an omnichannel provider of lease-purchase solutions to underserved and credit-challenged customers. It operates in three segments: Progressive Leasing, Aaron’s Business, and Vive. The company offers its lease-purchase solutions to customers for various products in the furniture and appliance, jewelry, mobile phones and accessories, mattress, and automobile electronics and accessories industries. It also engages in the sale, lease ownership, and specialty retailing of furniture, consumer electronics, home appliances, and accessories. In addition, the company manufactures and sells bedding, including mattresses and box springs; and upholstered living-room furniture, such as contemporary sofas, chairs, modular sofa, and ottoman collections. Further, it provides revolving loans through third-party federally insured banks to customers that may not qualify for traditional prime lending. As of December 31, 2019, the company operated through 1,502 Aaron's stores, including 1,167 company-operated stores; and 335 franchised stores in the United States, Canada, and Puerto Rico, as well as its e-commerce platform, aarons.com. Aaron's, Inc. was founded in 1955 and is headquartered in Atlanta, Georgia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/10 04:48
End of Day Share Price2020/04/09 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.