Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Rent-A-Center Inc. (RCII - Analyst Report), the largest rent-to-own operator in the U.S, leverages an extensive network of stores to effectively penetrate into its target markets, which in turn, facilitates the company to genetare healthy sales and gain a competitive advantage over its competitors.

Following its rationale, Rent-A-Center, which competes with Aaron’s Inc. (AAN - Snapshot Report) and Advance America, recently announced the opening of its new store in Rocky Mount, Virginia. The company through its latest stores expects to offer luxury furnishings, electrical devices, electronics and computers to the residents of this region.

The new showrooms will offer brands like HP, Ashley, Sony, Serta and Whirlpool. With this new store, Rent-A-Center now operates through 67 locations in Virginia.

The residents of the region will have the benefit of purchasing goods with flexible payment options, facilitating them to pay weekly, biweekly or monthly. Moreover, the company offers a lifetime recall service, which facilitates its customers to re-rent the same or a comparable item and get payments.

Earlier, Rent-A-Center delivered better-than-expected fourth-quarter 2011 results. However, increasing operating costs and shrinking margins remain a matter of concern going forward.

Rent-A-Center’s gross profit grew 4.5% to $517.3 million, whilegross margin shrunk 300 basis points to 70.1%. Adjusted operating profit inched up 1.8% to $83.2 million, whereas operating profit margin contracted 80 basis points to 11.3%. Adjusted EBITDA climbed 3.8% to $101.9 million, while adjusted EBITDA margin shriveled 70 basis points to 13.8%.

Cost of rentals and fees rose 15.9% to $152.8 million, whereas cost of merchandise sold soared 44.9% to $50.6 million. Salaries and other expenses climbed 3.9% to $396.6 million, whereas general and administrative expenses increased 14.3% to $36.1 million.

Currently, we have a long-term Neutral recommendation on the stock. However, the company has a Zacks #4 Rank, which translates into a short-term Sell rating.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%