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

NASDAQ:RCII • US76009N1000

Current stock price

26.78 USD
-0.03 (-0.11%)
At close:
26.09 USD
-0.69 (-2.58%)
After Hours:

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

4

1. RCII Profitability Analysis

1.1 Basic Checks

  • In the past year RCII was profitable.
  • 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.
  • RCII has a Return On Equity of 3.56%. This is in the lower half of the industry: RCII underperforms 63.21% of its industry peers.
  • RCII's Return On Invested Capital of 12.42% is in line compared to the rest of the industry. RCII outperforms 59.43% of its industry peers.
  • Measured over the past 3 years, the Average Return On Invested Capital for RCII is significantly above the industry average of 13.24%.
  • 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

  • The Profit Margin of RCII (0.44%) is worse than 75.47% of its industry peers.
  • In the last couple of years the Profit Margin of RCII has grown nicely.
  • RCII has a Operating Margin (6.93%) which is in line with its industry peers.
  • In the last couple of years the Operating Margin of RCII has grown nicely.
  • 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.
  • RCII's Gross Margin has declined in the last couple of years.
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

  • The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so 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

  • RCII has an Altman-Z score of 3.21. This indicates that RCII is financially healthy and has little risk of bankruptcy at the moment.
  • RCII has a better Altman-Z score (3.21) than 66.04% of its industry peers.
  • RCII has a debt to FCF ratio of 3.32. This is a good value and a sign of high solvency as RCII would need 3.32 years to pay back of all of its debts.
  • The Debt to FCF ratio of RCII (3.32) is better than 76.42% of its industry peers.
  • RCII has a Debt/Equity ratio of 2.50. This is a high value indicating a heavy dependency on external financing.
  • RCII has a Debt to Equity ratio of 2.50. This is in the lower half of the industry: RCII underperforms 73.58% of its industry peers.
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.
  • Looking at the Current ratio, with a value of 1.88, RCII belongs to the top 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.
  • RCII has a Quick ratio (0.46) which is comparable to the rest of the 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

  • RCII shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -28.91%.
  • The Earnings Per Share has been growing by 48.44% on average over the past years. This is a very strong growth
  • The Revenue has been growing slightly by 7.21% in the past year.
  • The Revenue has been growing by 9.11% on average over the past years. This is quite good.
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.
  • The Revenue is expected to decrease by -1.10% on average over the next years.
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.
  • The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
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

  • A Price/Earnings ratio of 6.85 indicates a rather cheap valuation of RCII.
  • 79.25% of the companies in the same industry are more expensive than RCII, based on the Price/Earnings ratio.
  • The average S&P500 Price/Earnings ratio is at 26.77. RCII is valued rather cheaply when compared to this.
  • 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 21.75, 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

  • Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of RCII is on the same level as its industry peers.
  • RCII's Price/Free Cash Flow ratio is rather cheap when compared to the industry. RCII is cheaper than 99.06% of the companies in the same industry.
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

  • A cheap valuation may be justified as RCII's earnings are expected to decrease with -9.64% in the coming years.
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.
  • Compared to an average industry Dividend Yield of 3.82, RCII pays a better dividend. On top of this RCII pays more dividend than 96.23% of the companies listed 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 paid a dividend for at least 10 years, which is a reliable track record.
  • RCII has decreased its dividend 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
Industry Strength90.68
Industry Growth75.78
Earnings (Last)02-23
Earnings (Next)05-02
Inst Owners80.68%
Inst Owner Change2.72%
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 Number0 (-100%)
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 Fundamental Analysis FAQ

What is the fundamental rating for RCII stock?

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


What is the valuation status of RENT-A-CENTER INC (RCII) stock?

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


What is the profitability of RCII stock?

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


Can you provide the expected EPS growth for RCII stock?

The Earnings per Share (EPS) of RENT-A-CENTER INC (RCII) is expected to decline by -34.02% in the next year.


Is the dividend of RENT-A-CENTER INC sustainable?

The dividend rating of RENT-A-CENTER INC (RCII) is 6 / 10 and the dividend payout ratio is 403.3%.