Rent-A-Center is a rent-to-own industry leader based in Plano, Texas that provides consumer electronics, appliances, computers, furniture, and accessories under flexible rental purchase agreements with no long-term obligation.
Solid Q2 Results
Back in August, Rent-A-Center reported earnings of 60 cents a share, which beat the Zacks Consensus Estimate thanks to low operating expenses and reduced interest expenses during the quarter. Total revenue reached $655.9 million, while same-store sales grew 5.8%, marking the 10th straight quarter of comps improvement.
Revenues at RCII’s Core U.S. segment declined around 1% to $451.1 million, but the decrease was offset by the company’s strong comps performance. And thanks to its refranchising efforts (Rent-A-Center is selling off over 80 locations), Franchising revenues surged to $14.9 million.
As a result, management lifted its view for fiscal 2019, and now expects same-store sales growth in the mid-single digits and consolidated revenues to improve.
RCII is On the Rise
Shares of Rent-A-Center have soared this year, gaining roughly 56% compared to the S&P 500’s return of roughly 15.3%. Earnings estimates have also been rising, and RCII is now a Zacks Rank #1 (Strong Buy).
For the current fiscal year, seven analysts have revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has risen 19 cents from $2.08 to $2.27; earnings could see almost 115% year-over-year growth. 2020 looks pretty strong too, with earnings and revenue expected to continue positive year-over-year growth.
RCII currently trades around 11.4X its forward full-year earnings estimates, a discount compared to the broader Consumer Discretionary market. Investors may see further upside to shares if Rent-A-Center continues to improve its financial position and expand its digital growth initiatives.
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Bull of the Day: Rent-A-Center (RCII)
Rent-A-Center is a rent-to-own industry leader based in Plano, Texas that provides consumer electronics, appliances, computers, furniture, and accessories under flexible rental purchase agreements with no long-term obligation.
Solid Q2 Results
Back in August, Rent-A-Center reported earnings of 60 cents a share, which beat the Zacks Consensus Estimate thanks to low operating expenses and reduced interest expenses during the quarter. Total revenue reached $655.9 million, while same-store sales grew 5.8%, marking the 10th straight quarter of comps improvement.
Revenues at RCII’s Core U.S. segment declined around 1% to $451.1 million, but the decrease was offset by the company’s strong comps performance. And thanks to its refranchising efforts (Rent-A-Center is selling off over 80 locations), Franchising revenues surged to $14.9 million.
As a result, management lifted its view for fiscal 2019, and now expects same-store sales growth in the mid-single digits and consolidated revenues to improve.
RCII is On the Rise
Shares of Rent-A-Center have soared this year, gaining roughly 56% compared to the S&P 500’s return of roughly 15.3%. Earnings estimates have also been rising, and RCII is now a Zacks Rank #1 (Strong Buy).
For the current fiscal year, seven analysts have revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has risen 19 cents from $2.08 to $2.27; earnings could see almost 115% year-over-year growth. 2020 looks pretty strong too, with earnings and revenue expected to continue positive year-over-year growth.
RCII currently trades around 11.4X its forward full-year earnings estimates, a discount compared to the broader Consumer Discretionary market. Investors may see further upside to shares if Rent-A-Center continues to improve its financial position and expand its digital growth initiatives.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
See 7 breakthrough stocks now>>