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Rent-A-Center (RCII) Dips More Than Broader Markets: What You Should Know

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Rent-A-Center (RCII - Free Report) closed the most recent trading day at $48.91, moving -0.91% from the previous trading session. This change lagged the S&P 500's daily loss of 0.3%. At the same time, the Dow lost 0.25%, and the tech-heavy Nasdaq gained 0.2%.

Prior to today's trading, shares of the company that leases furniture and appliances with an option to buy had gained 13.78% over the past month. This has outpaced the Consumer Discretionary sector's loss of 1.32% and the S&P 500's gain of 3.11% in that time.

Investors will be hoping for strength from Rent-A-Center as it approaches its next earnings release. In that report, analysts expect Rent-A-Center to post earnings of $1.56 per share. This would mark year-over-year growth of 51.46%. Our most recent consensus estimate is calling for quarterly revenue of $1.2 billion, up 66.99% from the year-ago period.

RCII's full-year Zacks Consensus Estimates are calling for earnings of $6.05 per share and revenue of $4.61 billion. These results would represent year-over-year changes of +71.39% and +63.76%, respectively.

Investors should also note any recent changes to analyst estimates for Rent-A-Center. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. The Zacks Consensus EPS estimate has moved 0.25% higher within the past month. Rent-A-Center is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, Rent-A-Center is holding a Forward P/E ratio of 8.15. For comparison, its industry has an average Forward P/E of 14.51, which means Rent-A-Center is trading at a discount to the group.

Also, we should mention that RCII has a PEG ratio of 0.24. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Consumer Services - Miscellaneous industry currently had an average PEG ratio of 1.51 as of yesterday's close.

The Consumer Services - Miscellaneous industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 96, putting it in the top 38% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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