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Rent-A-Center (RCII) Gains As Market Dips: What You Should Know

Zacks Equity Research

Rent-A-Center (RCII) closed the most recent trading day at $27.03, moving +0.41% from the previous trading session. This move outpaced the S&P 500's daily loss of 1.09%. Meanwhile, the Dow lost 1.23%, and the Nasdaq, a tech-heavy index, lost 1.19%.

Heading into today, shares of the company that leases furniture and appliances with an option to buy had lost 2.18% over the past month, lagging the Consumer Discretionary sector's gain of 0.27% and the S&P 500's gain of 2.62% in that time.

Investors will be hoping for strength from RCII as it approaches its next earnings release, which is expected to be August 7, 2019. In that report, analysts expect RCII to post earnings of $0.56 per share. This would mark year-over-year growth of 19.15%. Our most recent consensus estimate is calling for quarterly revenue of $641.66 million, down 2.15% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.12 per share and revenue of $2.61 billion, which would represent changes of +100% and -1.83%, respectively, from the prior year.

Investors might also notice 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. RCII is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, RCII is currently trading at a Forward P/E ratio of 12.68. This valuation marks a discount compared to its industry's average Forward P/E of 14.18.

The Consumer Services - Miscellaneous industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 18, which puts it in the top 8% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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