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Rent-A-Center (RCII) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Rent-A-Center (RCII) closed the most recent trading day at $25.87, moving -1.41% from the previous trading session. This change lagged the S&P 500's daily loss of 0.3%. Elsewhere, the Dow lost 0.52%, while the tech-heavy Nasdaq lost 0.14%.

Heading into today, shares of the company that leases furniture and appliances with an option to buy had gained 1.39% over the past month, lagging the Consumer Discretionary sector's gain of 2.36% and the S&P 500's gain of 2.46% in that time.

Investors will be hoping for strength from RCII as it approaches its next earnings release, which is expected to be November 6, 2019. In that report, analysts expect RCII to post earnings of $0.50 per share. This would mark year-over-year growth of 56.25%. Our most recent consensus estimate is calling for quarterly revenue of $628.29 million, down 2.58% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.27 per share and revenue of $2.62 billion, which would represent changes of +114.15% and -1.6%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for RCII. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. RCII is holding a Zacks Rank of #2 (Buy) right now.

Investors should also note RCII's current valuation metrics, including its Forward P/E ratio of 11.58. This valuation marks a discount compared to its industry's average Forward P/E of 14.56.

The Consumer Services - Miscellaneous industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 44, which puts it in the top 18% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow RCII in the coming trading sessions, be sure to utilize Zacks.com.


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