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

Zacks Equity Research

In the latest trading session, Rent-A-Center (RCII) closed at $20.49, marking a -0.68% move from the previous day. This move lagged the S&P 500's daily gain of 0.66%. Elsewhere, the Dow gained 1.03%, while the tech-heavy Nasdaq added 0.46%.

Coming into today, shares of the company that leases furniture and appliances with an option to buy had lost 3.15% in the past month. In that same time, the Consumer Discretionary sector gained 2.95%, while the S&P 500 gained 3.97%.

Investors will be hoping for strength from RCII as it approaches its next earnings release. The company is expected to report EPS of $0.29, up 462.5% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $680.04 million, down 2.58% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.88 per share and revenue of $2.61 billion, which would represent changes of +77.36% and -1.95%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for RCII. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 a Zacks Rank #1 (Strong Buy).

Looking at its valuation, RCII is holding a Forward P/E ratio of 10.96. This valuation marks a discount compared to its industry's average Forward P/E of 13.

The Consumer Services - Miscellaneous industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 102, putting it in the top 40% 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.

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

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