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. 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.
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.
Looking at the Return On Equity, with a value of 3.56%, RCII is doing worse than 63.21% of the companies in the same industry.
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 13.07%.
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
RCII has a worse Profit Margin (0.44%) than 75.47% of its industry peers.
RCII's Profit Margin has improved in the last couple of years.
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 has a better Gross Margin (48.63%) than 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
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.
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 Altman-Z score of 3.21. This is in the better half of the industry: RCII outperforms 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.
The Debt to Equity ratio of RCII (2.50) is worse 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
RCII has a Current Ratio of 1.88. This is a normal value and indicates that RCII is financially healthy and should not expect problems in meeting its short term obligations.
RCII has a Current ratio of 1.88. This is amongst the best in the industry. RCII outperforms 80.19% of its industry peers.
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 of 0.46. This is comparable to the rest of the industry: RCII outperforms 49.06% of its industry peers.
| 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%.
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.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 6.85, the valuation of RCII can be described as very cheap.
79.25% of the companies in the same industry are more expensive than RCII, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.28, RCII is valued rather cheaply.
A Price/Forward Earnings ratio of 7.67 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.
The average S&P500 Price/Forward Earnings ratio is at 21.76. RCII is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.85 | ||
| Fwd PE | 7.67 |
4.2 Price Multiples
RCII's Enterprise Value to EBITDA ratio is in line with 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
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%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.51%, RCII is a good candidate for dividend investing.
RCII's Dividend Yield is rather good when compared to the industry average which is at 5.27. RCII pays more dividend than 96.23% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, 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.
The dividend of RCII decreased recently.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
403.30% of the earnings are spent on dividend by RCII. 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 Change4.05%
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%