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Aaron's (AAN) Gains But Lags Market: What You Should Know

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In the latest trading session, Aaron's (AAN - Free Report) closed at $58.29, marking a +0.26% move from the previous day. This change lagged the S&P 500's 1.27% gain on the day. Meanwhile, the Dow gained 1.18%, and the Nasdaq, a tech-heavy index, added 1.87%.

Prior to today's trading, shares of the rent-to-own company had lost 0.46% over the past month. This has lagged the Retail-Wholesale sector's gain of 2.76% and the S&P 500's gain of 0.37% in that time.

Investors will be hoping for strength from AAN as it approaches its next earnings release. On that day, AAN is projected to report earnings of $0.91 per share, which would represent year-over-year growth of 24.66%. Our most recent consensus estimate is calling for quarterly revenue of $965.25 million, up 0.15% from the year-ago period.

AAN's full-year Zacks Consensus Estimates are calling for earnings of $4.05 per share and revenue of $4.12 billion. These results would represent year-over-year changes of +4.11% and +4.43%, respectively.

Investors might also notice recent changes to analyst estimates for AAN. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. AAN is currently a Zacks Rank #1 (Strong Buy).

Looking at its valuation, AAN is holding a Forward P/E ratio of 14.37. For comparison, its industry has an average Forward P/E of 15.04, which means AAN is trading at a discount to the group.

It is also worth noting that AAN currently has a PEG ratio of 0.97. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Consumer Electronics was holding an average PEG ratio of 1.37 at yesterday's closing price.

The Retail - Consumer Electronics industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 58, which puts it in the top 23% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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