AARON'S CO INC/THE (AAN)
US00258W1080 - Common Stock
AAN gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 126 industry peers in the Specialty Retail industry. AAN has a medium profitability rating, but doesn't score so well on its financial health evaluation. AAN has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
AAN had positive earnings in the past year.
In the past year AAN had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: AAN reported negative net income in multiple years.
Each year in the past 5 years AAN had a positive operating cash flow.
1.2 Ratios
AAN's Return On Assets of 0.16% is in line compared to the rest of the industry. AAN outperforms 48.41% of its industry peers.
With a Return On Equity value of 0.41%, AAN perfoms like the industry average, outperforming 54.76% of the companies in the same industry.
AAN has a Return On Invested Capital (1.94%) which is in line with its industry peers.
AAN had an Average Return On Invested Capital over the past 3 years of 7.21%. This is significantly below the industry average of 13.97%.
The 3 year average ROIC (7.21%) for AAN is well above the current ROIC(1.94%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.16% | ||
| ROE | 0.41% | ||
| ROIC | 1.94% |
ROA(3y)2.5%
ROA(5y)-2.14%
ROE(3y)4.98%
ROE(5y)-3.82%
ROIC(3y)7.21%
ROIC(5y)7.72%
1.3 Margins
AAN has a Profit Margin of 0.13%. This is comparable to the rest of the industry: AAN outperforms 50.00% of its industry peers.
In the last couple of years the Profit Margin of AAN has declined.
With a Operating Margin value of 1.07%, AAN perfoms like the industry average, outperforming 46.03% of the companies in the same industry.
AAN's Operating Margin has declined in the last couple of years.
With an excellent Gross Margin value of 52.31%, AAN belongs to the best of the industry, outperforming 82.54% of the companies in the same industry.
AAN's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.07% | ||
| PM (TTM) | 0.13% | ||
| GM | 52.31% |
OM growth 3Y-44.69%
OM growth 5Y-28.43%
PM growth 3YN/A
PM growth 5Y-45.82%
GM growth 3Y-5.74%
GM growth 5Y-2.88%
2. Health
2.1 Basic Checks
AAN has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, AAN has less shares outstanding
AAN has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, AAN has an improved debt to assets ratio.
2.2 Solvency
AAN has an Altman-Z score of 0.96. This is a bad value and indicates that AAN is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.96, AAN is doing worse than 77.78% of the companies in the same industry.
The Debt to FCF ratio of AAN is 2.26, which is a good value as it means it would take AAN, 2.26 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.26, AAN is in the better half of the industry, outperforming 69.05% of the companies in the same industry.
AAN has a Debt/Equity ratio of 0.27. This is a healthy value indicating a solid balance between debt and equity.
AAN has a Debt to Equity ratio of 0.27. This is comparable to the rest of the industry: AAN outperforms 58.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | 2.26 | ||
| Altman-Z | 0.96 |
ROIC/WACC0.21
WACC9.18%
2.3 Liquidity
AAN has a Current Ratio of 0.29. This is a bad value and indicates that AAN is not financially healthy enough and could expect problems in meeting its short term obligations.
AAN has a worse Current ratio (0.29) than 97.62% of its industry peers.
AAN has a Quick Ratio of 0.29. This is a bad value and indicates that AAN is not financially healthy enough and could expect problems in meeting its short term obligations.
AAN has a Quick ratio of 0.19. This is amonst the worse of the industry: AAN underperforms 86.51% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.29 | ||
| Quick Ratio | 0.19 |
3. Growth
3.1 Past
The earnings per share for AAN have decreased strongly by -61.17% in the last year.
The earnings per share for AAN have been decreasing by -42.94% on average. This is quite bad
Looking at the last year, AAN shows a decrease in Revenue. The Revenue has decreased by -4.87% in the last year.
Measured over the past years, AAN shows a small growth in Revenue. The Revenue has been growing by 3.58% on average per year.
EPS 1Y (TTM)-61.17%
EPS 3YN/A
EPS 5Y-42.94%
EPS growth Q2Q-388.89%
Revenue 1Y (TTM)-4.87%
Revenue growth 3Y7.24%
Revenue growth 5Y3.58%
Revenue growth Q2Q-10.2%
3.2 Future
The Earnings Per Share is expected to decrease by -10.86% on average over the next years. This is quite bad
Based on estimates for the next years, AAN will show a small growth in Revenue. The Revenue will grow by 2.34% on average per year.
EPS Next Y-92.35%
EPS Next 2Y-7.19%
EPS Next 3Y-36.79%
EPS Next 5Y-10.86%
Revenue Next Year-1.66%
Revenue Next 2Y0.87%
Revenue Next 3Y0.91%
Revenue Next 5Y2.34%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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
Based on the Price/Earnings ratio of 8.49, the valuation of AAN can be described as reasonable.
Based on the Price/Earnings ratio, AAN is valued cheaply inside the industry as 88.89% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 28.06, AAN is valued rather cheaply.
A Price/Forward Earnings ratio of 110.94 indicates a quite expensive valuation of AAN.
61.90% of the companies in the same industry are cheaper than AAN, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of AAN to the average of the S&P500 Index (20.72), we can say AAN is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.49 | ||
| Fwd PE | 110.94 |
4.2 Price Multiples
AAN's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. AAN is cheaper than 100.00% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, AAN is valued cheaply inside the industry as 98.41% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.49 | ||
| EV/EBITDA | 0.61 |
4.3 Compensation for Growth
A cheap valuation may be justified as AAN's earnings are expected to decrease with -36.79% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-7.19%
EPS Next 3Y-36.79%
5. Dividend
5.1 Amount
AAN has a Yearly Dividend Yield of 6.83%, which is a nice return.
The stock price of AAN dropped by -32.84% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 3.50, AAN pays a better dividend. On top of this AAN pays more dividend than 97.62% of the companies listed in the same industry.
AAN's Dividend Yield is rather good when compared to the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.83% |
5.2 History
AAN has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
AAN pays out 527.03% of its income as dividend. This is not a sustainable payout ratio.
DP527.03%
EPS Next 2Y-7.19%
EPS Next 3Y-36.79%
AARON'S CO INC/THE
NYSE:AAN (5/2/2024, 7:04:00 PM)
After market: 6.79 0 (0%)6.79
+0.01 (+0.15%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap213.75M
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.83% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.49 | ||
| Fwd PE | 110.94 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.16% | ||
| ROE | 0.41% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 1.07% | ||
| PM (TTM) | 0.13% | ||
| GM | 52.31% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.17
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.29 | ||
| Quick Ratio | 0.19 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-61.17%
EPS 3YN/A
EPS 5Y
EPS growth Q2Q
EPS Next Y-92.35%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-4.87%
Revenue growth 3Y7.24%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y