Rent-A-Center Earnings Preview

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Investors never know what to expect for Rent-A-Center (NAS: RCII) , as it has wavered between topping and missing analysts estimates during the past fiscal year. The company will unveil its latest earnings on Monday. Rent-A-Center is an operator in the United States rent-to-own industry.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Rent-A-Center, with eight of 11 rating it a buy and the remainder rating it a hold. Analysts like Rent-A-Center better than competitor Aaron's overall. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $697.5 million in revenue this quarter. That would represent a rise of 5% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.58 per share. Estimates range from $0.56 to $0.61.

What our community says:
CAPS All-Stars are solidly backing the stock with 91.1% awarding it an outperform rating. The community at large backs the All-Stars with 83.3% granting it a rating of outperform. Fools have embraced Rent-A-Center, though the message boards have been quiet lately with only 79 posts in the past 30 days. Despite the majority sentiment in favor of Rent-A-Center, the stock has a middling CAPS rating of three out of five stars.

Management:
Rent-A-Center's income has fallen year over year by an average of 12% over the past five quarters. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

15.9%

17.0%

16.8%

15.2%

Operating Margin

10.5%

10.8%

9.3%

10.4%

Net Margin

5.7%

6.0%

4.7%

6.1%

One final thing: If you want to keep tabs on Rent-A-Center movements, and for more analysis on the company, make sure you add it to your watchlist.

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At the time this article was published

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