We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Rent-A-Center Stock Gains 9% After Rejecting Buyout Offer
Read MoreHide Full Article
Shares of Rent-A-Center, Inc. gained 8.9% yesterday, following the company’s rejection of a buyout offer by Private equity firm, Vintage Capital. The company in the recent past was offered $15 per share, which was 35% above the Monday’s closing price of $11.10. The value of the deal would have been nearly $800 million.
Rent-A-Center stated that Vintage offer "significantly undervalues the company". The company further added that the strategic initiatives which it has taken will deliver better value to shareholders than the Vintage’s offer.
Management has undertaken initiatives to strengthen the performance of its Core U.S. segment. In an attempt to augment cash flow generation from Core U.S. business, the company is focusing on rates, terms and purchase options that are much more aligned with the customer’s needs. The company is also optimizing product mix, increasing the average ticket price, upgrading workforce, concentrating on lowering delinquency rates and rationalizing existing stores as well as contemplating on new ones.
The company’s new business model called Acceptance Now is also gaining traction. Management is focusing on optimizing strategic retail partnerships in order to enhance service and profitability. Further, it is centralizing account management to tackle operations more effectively and execute risk assessment polices across all locations.
Rent-A-Center is investing in enhancing omni-channel platform so that customers can experience a seamless approach across channels, markets, retailers, products and brands. The company is increasing e-commerce offerings and mobile applications, and leveraging cloud-based point-of-sale platform to manage orders more efficiently, lower losses and cut operating costs.
However, we noted that despite yesterday’s gain, the stock is still down 3.7% in the past one month, underperforming the Zacks categorized Consumer Services – Miscellaneous industry’s increase of 7%. We remained concerned about this Zacks Rank #4 (Sell) company’s top and bottom line performance, which has been declining year-over-year. Moreover, total revenue has also missed the consensus mark for the seventh straight quarter.
G-III Apparel Group has an impressive long-term earnings growth rate of 15%.
Tilly's has long-term earnings growth rate of 13% and also surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average earnings beat of 120.4%.
The Children's Place has reported earnings beat in the trailing four quarters, with an average of 36.6%.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Rent-A-Center Stock Gains 9% After Rejecting Buyout Offer
Shares of Rent-A-Center, Inc. gained 8.9% yesterday, following the company’s rejection of a buyout offer by Private equity firm, Vintage Capital. The company in the recent past was offered $15 per share, which was 35% above the Monday’s closing price of $11.10. The value of the deal would have been nearly $800 million.
Rent-A-Center stated that Vintage offer "significantly undervalues the company". The company further added that the strategic initiatives which it has taken will deliver better value to shareholders than the Vintage’s offer.
Management has undertaken initiatives to strengthen the performance of its Core U.S. segment. In an attempt to augment cash flow generation from Core U.S. business, the company is focusing on rates, terms and purchase options that are much more aligned with the customer’s needs. The company is also optimizing product mix, increasing the average ticket price, upgrading workforce, concentrating on lowering delinquency rates and rationalizing existing stores as well as contemplating on new ones.
The company’s new business model called Acceptance Now is also gaining traction. Management is focusing on optimizing strategic retail partnerships in order to enhance service and profitability. Further, it is centralizing account management to tackle operations more effectively and execute risk assessment polices across all locations.
Rent-A-Center is investing in enhancing omni-channel platform so that customers can experience a seamless approach across channels, markets, retailers, products and brands. The company is increasing e-commerce offerings and mobile applications, and leveraging cloud-based point-of-sale platform to manage orders more efficiently, lower losses and cut operating costs.
However, we noted that despite yesterday’s gain, the stock is still down 3.7% in the past one month, underperforming the Zacks categorized Consumer Services – Miscellaneous industry’s increase of 7%. We remained concerned about this Zacks Rank #4 (Sell) company’s top and bottom line performance, which has been declining year-over-year. Moreover, total revenue has also missed the consensus mark for the seventh straight quarter.
Better-ranked stocks worth considering in the retail space include G-III Apparel Group, Ltd. (GIII - Free Report) , Tilly's, Inc. (TLYS - Free Report) and The Children's Place, Inc. (PLCE - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
G-III Apparel Group has an impressive long-term earnings growth rate of 15%.
Tilly's has long-term earnings growth rate of 13% and also surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average earnings beat of 120.4%.
The Children's Place has reported earnings beat in the trailing four quarters, with an average of 36.6%.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>