RENT-A-CENTER INC (RCII) Fundamental Analysis & Valuation

NASDAQ:RCII • US76009N1000

26.78 USD
-0.03 (-0.11%)
At close: Feb 24, 2023
26.09 USD
-0.69 (-2.58%)
After Hours: 2/24/2023, 8:00:01 PM
Overview Stock Chart Technical Analysis Fundamental Analysis Forecast Earnings Financials Ownership News

This RCII fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

Fundamental Rating

4

RCII gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 124 industry peers in the Specialty Retail industry. Both the profitability and the financial health of RCII get a neutral evaluation. Nothing too spectacular is happening here. RCII has a valuation in line with the averages, but on the other hand it scores bad on growth.


Dividend Valuation Growth Profitability Health

4

1. RCII Profitability Analysis

1.1 Basic Checks

  • RCII had positive earnings in the past year.
  • RCII had a positive operating cash flow in the past year.
RCII Yearly Net Income VS EBIT VS OCF VS FCFRCII Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 0 100M -100M 200M 300M 400M

1.2 Ratios

  • With a Return On Assets value of 0.71%, RCII is not doing good in the industry: 72.64% of the companies in the same industry are doing better.
  • The Return On Equity of RCII (3.56%) is worse than 63.21% of its industry peers.
  • RCII has a Return On Invested Capital (12.42%) which is comparable to the rest of the industry.
  • The Average Return On Invested Capital over the past 3 years for RCII is significantly above the industry average of 13.62%.
  • The 3 year average ROIC (30.27%) for RCII is well above the current ROIC(12.42%). The reason for the recent decline needs to be investigated.
Industry RankSector Rank
ROA 0.71%
ROE 3.56%
ROIC 12.42%
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)30.27%
ROIC(5y)N/A
RCII Yearly ROA, ROE, ROICRCII Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 0 20 -20

1.3 Margins

  • With a Profit Margin value of 0.44%, RCII is not doing good in the industry: 75.47% of the companies in the same industry are doing better.
  • In the last couple of years the Profit Margin of RCII has grown nicely.
  • RCII's Operating Margin of 6.93% is in line compared to the rest of the industry. RCII outperforms 55.66% of its industry peers.
  • RCII's Operating Margin has improved in the last couple of years.
  • RCII has a Gross Margin of 48.63%. This is in the better half of the industry: RCII outperforms 79.25% of its industry peers.
  • In the last couple of years the Gross Margin of RCII has declined.
Industry RankSector Rank
OM 6.93%
PM (TTM) 0.44%
GM 48.63%
OM growth 3Y31.31%
OM growth 5Y28%
PM growth 3Y109.65%
PM growth 5YN/A
GM growth 3Y-8.4%
GM growth 5Y-5.67%
RCII Yearly Profit, Operating, Gross MarginsRCII Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 0 20 40 60

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5

2. RCII Health Analysis

2.1 Basic Checks

  • With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), RCII is creating value.
  • There is no outstanding debt for RCII. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
RCII Yearly Shares OutstandingRCII Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 20M 40M 60M
RCII Yearly Total Debt VS Total AssetsRCII Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 500M 1B 1.5B 2B 2.5B

2.2 Solvency

  • An Altman-Z score of 3.21 indicates that RCII is not in any danger for bankruptcy at the moment.
  • The Altman-Z score of RCII (3.21) is better than 66.04% of its industry peers.
  • The Debt to FCF ratio of RCII is 3.32, which is a good value as it means it would take RCII, 3.32 years of fcf income to pay off all of its debts.
  • Looking at the Debt to FCF ratio, with a value of 3.32, RCII is in the better half of the industry, outperforming 76.42% of the companies in the same industry.
  • RCII has a Debt/Equity ratio of 2.50. This is a high value indicating a heavy dependency on external financing.
  • With a Debt to Equity ratio value of 2.50, RCII is not doing good in the industry: 73.58% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 2.5
Debt/FCF 3.32
Altman-Z 3.21
ROIC/WACC1.25
WACC9.91%
RCII Yearly LT Debt VS Equity VS FCFRCII Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 500M 1B 1.5B

2.3 Liquidity

  • A Current Ratio of 1.88 indicates that RCII should not have too much problems paying its short term obligations.
  • With an excellent Current ratio value of 1.88, RCII belongs to the best of the industry, outperforming 80.19% of the companies in the same industry.
  • RCII has a Quick Ratio of 1.88. This is a bad value and indicates that RCII is not financially healthy enough and could expect problems in meeting its short term obligations.
  • Looking at the Quick ratio, with a value of 0.46, RCII is in line with its industry, outperforming 49.06% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.88
Quick Ratio 0.46
RCII Yearly Current Assets VS Current LiabilitesRCII Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 500M 1B 1.5B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

3

3. RCII Growth Analysis

3.1 Past

  • The earnings per share for RCII have decreased strongly by -28.91% in the last year.
  • RCII shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 48.44% yearly.
  • RCII shows a small growth in Revenue. In the last year, the Revenue has grown by 7.21%.
  • Measured over the past years, RCII shows a quite strong growth in Revenue. The Revenue has been growing by 9.11% on average per year.
EPS 1Y (TTM)-28.91%
EPS 3Y75.31%
EPS 5Y48.44%
EPS Q2Q%-38.16%
Revenue 1Y (TTM)7.21%
Revenue growth 3Y19.88%
Revenue growth 5Y9.11%
Sales Q2Q%-13.32%

3.2 Future

  • Based on estimates for the next years, RCII will show a decrease in Earnings Per Share. The EPS will decrease by -4.38% on average per year.
  • Based on estimates for the next years, RCII will show a decrease in Revenue. The Revenue will decrease by -1.10% on average per year.
EPS Next Y-34.02%
EPS Next 2Y-20.68%
EPS Next 3Y-9.64%
EPS Next 5Y-4.38%
Revenue Next Year-7.76%
Revenue Next 2Y-6.15%
Revenue Next 3Y-2.54%
Revenue Next 5Y-1.1%

3.3 Evolution

  • The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
  • When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
RCII Yearly Revenue VS EstimatesRCII Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 1B 2B 3B 4B
RCII Yearly EPS VS EstimatesRCII Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 0 2 4 6

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6

4. RCII Valuation Analysis

4.1 Price/Earnings Ratio

  • RCII is valuated cheaply with a Price/Earnings ratio of 6.85.
  • Compared to the rest of the industry, the Price/Earnings ratio of RCII indicates a somewhat cheap valuation: RCII is cheaper than 79.25% of the companies listed in the same industry.
  • Compared to an average S&P500 Price/Earnings ratio of 26.29, RCII is valued rather cheaply.
  • A Price/Forward Earnings ratio of 7.67 indicates a rather cheap valuation of RCII.
  • RCII's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. RCII is cheaper than 72.64% of the companies in the same industry.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 24.57, RCII is valued rather cheaply.
Industry RankSector Rank
PE 6.85
Fwd PE 7.67
RCII Price Earnings VS Forward Price EarningsRCII Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40 50

4.2 Price Multiples

  • The rest of the industry has a similar Enterprise Value to EBITDA ratio as RCII.
  • 99.06% of the companies in the same industry are more expensive than RCII, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 3.62
EV/EBITDA 5.9
RCII Per share dataRCII EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 20 40 60

4.3 Compensation for Growth

  • RCII's earnings are expected to decrease with -9.64% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)0.14
EPS Next 2Y-20.68%
EPS Next 3Y-9.64%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

5

5. RCII Dividend Analysis

5.1 Amount

  • RCII has a Yearly Dividend Yield of 5.51%, which is a nice return.
  • RCII's Dividend Yield is rather good when compared to the industry average which is at 2.23. RCII pays more dividend than 96.23% of the companies in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.82, RCII pays a better dividend.
Industry RankSector Rank
Dividend Yield 5.51%

5.2 History

  • RCII has been paying a dividend for at least 10 years, so it has a reliable track record.
  • The dividend of RCII decreased recently.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
RCII Yearly Dividends per shareRCII Yearly Dividends per shareYearly Dividends per share 2016 2017 2019 2020 2021 2022 0.5 1

5.3 Sustainability

  • RCII pays out 403.30% of its income as dividend. This is not a sustainable payout ratio.
DP403.3%
EPS Next 2Y-20.68%
EPS Next 3Y-9.64%
RCII Yearly Income VS Free CF VS DividendRCII Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 0 100M -100M 200M 300M
RCII Dividend Payout.RCII Dividend Payout, showing the Payout Ratio.RCII Dividend Payout.PayoutRetained Earnings

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RCII Fundamentals: All Metrics, Ratios and Statistics

RENT-A-CENTER INC

NASDAQ:RCII (2/24/2023, 8:00:01 PM)

After market: 26.09 -0.69 (-2.58%)

26.78

-0.03 (-0.11%)

Chartmill FA Rating
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)02-23
Earnings (Next)05-02
Inst Owners80.68%
Inst Owner Change2.68%
Ins Owners6.65%
Ins Owner Change0%
Market Cap1.49B
Revenue(TTM)4.43B
Net Income(TTM)19.52M
Analysts80
Price Target35.13 (31.18%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 5.51%
Yearly Dividend1.24
Dividend Growth(5Y)N/A
DP403.3%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.62%
Min EPS beat(2)3.55%
Max EPS beat(2)13.69%
EPS beat(4)3
Avg EPS beat(4)-3.57%
Min EPS beat(4)-34.34%
Max EPS beat(4)13.69%
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-0.56%
Min Revenue beat(2)-0.68%
Max Revenue beat(2)-0.44%
Revenue beat(4)1
Avg Revenue beat(4)-0.81%
Min Revenue beat(4)-4.3%
Max Revenue beat(4)2.18%
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-3.13%
PT rev (3m)-0.88%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.32%
EPS NY rev (1m)0%
EPS NY rev (3m)-4.12%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.88%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.75%
Valuation
Industry RankSector Rank
PE 6.85
Fwd PE 7.67
P/S 0.34
P/FCF 3.62
P/OCF 3.12
P/B 2.72
P/tB N/A
EV/EBITDA 5.9
EPS(TTM)3.91
EY14.6%
EPS(NY)3.49
Fwd EY13.04%
FCF(TTM)7.4
FCFY27.65%
OCF(TTM)8.59
OCFY32.07%
SpS79.51
BVpS9.85
TBVpS-2.07
PEG (NY)N/A
PEG (5Y)0.14
Graham NumberN/A
Profitability
Industry RankSector Rank
ROA 0.71%
ROE 3.56%
ROCE N/A
ROIC 12.42%
ROICexc 13.54%
ROICexgc 21.27%
OM 6.93%
PM (TTM) 0.44%
GM 48.63%
FCFM N/A
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)30.27%
ROIC(5y)N/A
ROICexc(3y)25.34%
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexgc growth 3Y28.81%
ROICexgc growth 5Y29.73%
ROICexc growth 3Y15.41%
ROICexc growth 5Y21.16%
OM growth 3Y31.31%
OM growth 5Y28%
PM growth 3Y109.65%
PM growth 5YN/A
GM growth 3Y-8.4%
GM growth 5Y-5.67%
F-Score5
Asset Turnover1.6
Health
Industry RankSector Rank
Debt/Equity 2.5
Debt/FCF 3.32
Debt/EBITDA 3
Cap/Depr 44%
Cap/Sales N/A
Interest Coverage N/A
Cash Conversion N/A
Profit Quality 2111.29%
Current Ratio 1.88
Quick Ratio 0.46
Altman-Z 3.21
F-Score5
WACC9.91%
ROIC/WACC1.25
Cap/Depr(3y)44.07%
Cap/Depr(5y)51.22%
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)151.15%
Profit Quality(5y)694.43%
High Growth Momentum
Growth
EPS 1Y (TTM)-28.91%
EPS 3Y75.31%
EPS 5Y48.44%
EPS Q2Q%-38.16%
EPS Next Y-34.02%
EPS Next 2Y-20.68%
EPS Next 3Y-9.64%
EPS Next 5Y-4.38%
Revenue 1Y (TTM)7.21%
Revenue growth 3Y19.88%
Revenue growth 5Y9.11%
Sales Q2Q%-13.32%
Revenue Next Year-7.76%
Revenue Next 2Y-6.15%
Revenue Next 3Y-2.54%
Revenue Next 5Y-1.1%
EBIT growth 1Y-28.39%
EBIT growth 3Y57.42%
EBIT growth 5Y39.67%
EBIT Next Year-27.85%
EBIT Next 3Y-6.53%
EBIT Next 5Y-3.7%
FCF growth 1Y63.75%
FCF growth 3Y18.25%
FCF growth 5Y2.4%
OCF growth 1Y68.67%
OCF growth 3Y19.92%
OCF growth 5Y2.07%

RENT-A-CENTER INC / RCII FAQ

What is the fundamental rating for RCII stock?

ChartMill assigns a fundamental rating of 4 / 10 to RCII.


Can you provide the valuation status for RENT-A-CENTER INC?

ChartMill assigns a valuation rating of 7 / 10 to RENT-A-CENTER INC (RCII). This can be considered as Undervalued.


Can you provide the profitability details for RENT-A-CENTER INC?

RENT-A-CENTER INC (RCII) has a profitability rating of 1 / 10.


What is the valuation of RENT-A-CENTER INC based on its PE and PB ratios?

The Price/Earnings (PE) ratio for RENT-A-CENTER INC (RCII) is 6.85 and the Price/Book (PB) ratio is 2.72.


What is the financial health of RENT-A-CENTER INC (RCII) stock?

The financial health rating of RENT-A-CENTER INC (RCII) is 5 / 10.