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Strength Seen in Rent-A-Center (RCII): Can Its 7.9% Jump Turn into More Strength?

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Rent-A-Center RCII shares rallied 7.9% in the last trading session to close at $22.99. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 23.1% loss over the past four weeks.

Virtual lease-to-own space offers incredible growth opportunities, and Rent-A-Center remains well positioned to tap the same. Growth potential at Acima coupled with strength in Rent-A-Center Business segment, support the company’s ability to attain 2022 target. Management estimates consolidated revenues in the bracket of $4.450-$4.600 billion for the current fiscal year.

This company that leases furniture and appliances with an option to buy is expected to post quarterly earnings of $1.02 per share in its upcoming report, which represents a year-over-year change of -37.4%. Revenues are expected to be $1.06 billion, down 10.9% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Rent-A-Center, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on RCII going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Rent-A-Center belongs to the Zacks Consumer Services - Miscellaneous industry. Another stock from the same industry, Aaron's Company, Inc. AAN, closed the last trading session 2.7% higher at $16.18. Over the past month, AAN has returned -15.5%.

For Aaron's , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.64. This represents a change of -39.1% from what the company reported a year ago. Aaron's currently has a Zacks Rank of #2 (Buy).


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