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Is Rent-A-Center (RCII) Stock Undervalued Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Rent-A-Center . RCII is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 12.03 right now. For comparison, its industry sports an average P/E of 15.89. Over the past 52 weeks, RCII's Forward P/E has been as high as 18.02 and as low as 9.32, with a median of 12.10.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. RCII has a P/S ratio of 0.56. This compares to its industry's average P/S of 0.86.

Finally, investors will want to recognize that RCII has a P/CF ratio of 2.11. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 6.42. Over the past 52 weeks, RCII's P/CF has been as high as 2.11 and as low as 0.98, with a median of 1.27.

These are only a few of the key metrics included in Rent-A-Center's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, RCII looks like an impressive value stock at the moment.

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