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

Zacks Equity Research

Rent-A-Center (RCII) closed the most recent trading day at $25.50, moving -1.32% from the previous trading session. This move lagged the S&P 500's daily gain of 0.29%. Elsewhere, the Dow gained 0.17%, while the tech-heavy Nasdaq added 0.3%.

Coming into today, shares of the company that leases furniture and appliances with an option to buy had lost 5.35% in the past month. In that same time, the Consumer Discretionary sector gained 3.45%, while the S&P 500 gained 2.99%.

RCII will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.50, up 56.25% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $626.62 million, down 2.84% from the year-ago period.

RCII's full-year Zacks Consensus Estimates are calling for earnings of $2.26 per share and revenue of $2.62 billion. These results would represent year-over-year changes of +113.21% and -1.44%, respectively.

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

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. RCII currently has a Zacks Rank of #1 (Strong Buy).

Digging into valuation, RCII currently has a Forward P/E ratio of 11.42. For comparison, its industry has an average Forward P/E of 16.66, which means RCII is trading at a discount to the group.

The Consumer Services - Miscellaneous industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 26, which puts it in the top 11% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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