RENT-A-CENTER INC (RCII) Stock Fundamental Analysis
NASDAQ:RCII - Nasdaq - US76009N1000 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to RCII. RCII was compared to 121 industry peers in the Specialty Retail industry. RCII has only an average score on both its financial health and profitability. RCII has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year RCII was profitable.
In the past year RCII had a positive cash flow from operations.
RCII had positive earnings in 4 of the past 5 years.
Of the past 5 years RCII 4 years had a positive operating cash flow.
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 worse Return On Equity (3.56%) than 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.
RCII had an Average Return On Invested Capital over the past 3 years of 30.27%. This is significantly above the industry average of 12.33%.
The last Return On Invested Capital (12.42%) for RCII is well below the 3 year average (30.27%), which needs to be investigated, but indicates that RCII had better years and this may not be a problem.
| Industry Rank | Sector 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
1.3 Margins
Looking at the Profit Margin, with a value of 0.44%, RCII is doing worse than 75.47% of the companies in the same industry.
In the last couple of years the Profit Margin of RCII has grown nicely.
RCII has a Operating Margin of 6.93%. This is comparable to the rest of the industry: RCII outperforms 55.66% of its industry peers.
In the last couple of years the Operating Margin of RCII has grown nicely.
RCII's Gross Margin of 48.63% is fine compared to the rest 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 Rank | Sector 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%
2. Health
2.1 Basic Checks
RCII has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
RCII has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
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.
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.
A Debt/Equity ratio of 2.50 is on the high side and indicates that RCII has dependencies on debt financing.
RCII has a worse Debt to Equity ratio (2.50) than 73.58% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.5 | ||
| Debt/FCF | 3.32 | ||
| Altman-Z | 3.21 |
ROIC/WACC1.25
WACC9.91%
2.3 Liquidity
A Current Ratio of 1.88 indicates that RCII should not have too much problems paying its short term obligations.
RCII has a better Current ratio (1.88) than 80.19% of its industry peers.
A Quick Ratio of 0.46 indicates that RCII may have some problems paying 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 Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.88 | ||
| Quick Ratio | 0.46 |
3. Growth
3.1 Past
RCII shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -28.91%.
Measured over the past years, RCII shows a very strong growth in Earnings Per Share. The EPS has been growing by 48.44% on average per year.
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
RCII is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -4.38% yearly.
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
RCII is valuated cheaply with a Price/Earnings ratio of 6.85.
RCII's Price/Earnings ratio is a bit cheaper when compared to the industry. RCII is cheaper than 79.25% of the companies in the same industry.
When comparing the Price/Earnings ratio of RCII to the average of the S&P500 Index (29.62), we can say RCII is valued rather cheaply.
The Price/Forward Earnings ratio is 7.67, which indicates a rather cheap valuation of RCII.
Based on the Price/Forward Earnings ratio, RCII is valued a bit cheaper than 72.64% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.70, RCII is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.85 | ||
| Fwd PE | 7.67 |
4.2 Price Multiples
RCII's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, RCII is valued cheaper than 99.06% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.62 | ||
| EV/EBITDA | 5.9 |
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%
5. Dividend
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 4.32, 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 2.27, RCII pays a better dividend.
| Industry Rank | Sector 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
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%
26.78
-0.03 (-0.11%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners80.68%
Inst Owner Change-96.08%
Ins Owners6.65%
Ins Owner Change0%
Market Cap1.49B
Analysts80
Price Target35.13 (31.18%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector 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 Rank | Sector 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
Profitability
| Industry Rank | Sector 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
ROICexcg growth 3Y28.81%
ROICexcg 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 Rank | Sector 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%