RENT-A-CENTER INC (RCII)
US76009N1000 - Common Stock
We assign a fundamental rating of 5 out of 10 to RCII. RCII was compared to 126 industry peers in the Specialty Retail industry. RCII has an average financial health and profitability rating. RCII has a valuation in line with the averages, but it does not seem to be growing.
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.
Of the past 5 years RCII 4 years were profitable.
Of the past 5 years RCII 4 years had a positive operating cash flow.
1.2 Ratios
RCII has a Return On Assets of 0.71%. This is in the lower half of the industry: RCII underperforms 72.64% of its industry peers.
The Return On Equity of RCII (3.56%) is worse 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.
Measured over the past 3 years, the Average Return On Invested Capital for RCII is significantly above the industry average of 13.85%.
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 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 Profit Margin of 0.44%. This is in the lower half of the industry: RCII underperforms 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 comparable to the rest of the industry.
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), 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
An Altman-Z score of 3.21 indicates that RCII is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.21, RCII is in the better half of the industry, outperforming 66.04% of the companies in the same industry.
The Debt to FCF ratio of RCII is 3.32, which is a good value as it means it would take RCII, 3.32 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 3.32, RCII is doing good in the industry, outperforming 76.42% of the companies in the same industry.
RCII has a Debt/Equity ratio of 2.50. This is a high value indicating a heavy dependency on external 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
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.
With an excellent Current ratio value of 1.88, RCII belongs to the best of the industry, outperforming 80.19% of the companies in the same industry.
A Quick Ratio of 0.46 indicates that RCII may have some problems paying its short term obligations.
With a Quick ratio value of 0.46, RCII perfoms like the industry average, 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
The earnings per share for RCII have decreased strongly by -28.91% in the last year.
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.
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 growth Q2Q-38.16%
Revenue 1Y (TTM)7.21%
Revenue growth 3Y19.88%
Revenue growth 5Y9.11%
Revenue growth Q2Q-13.32%
3.2 Future
The Earnings Per Share is expected to decrease by -4.38% on average over the next years.
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
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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.
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 27.73. RCII is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 7.67 indicates a rather cheap valuation of RCII.
72.64% of the companies in the same industry are more expensive than RCII, based on the Price/Forward Earnings ratio.
RCII's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 20.41.
| 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
RCII has a Yearly Dividend Yield of 5.51%, which is a nice return.
Compared to an average industry Dividend Yield of 3.56, RCII pays a better dividend. On top of this RCII pays more dividend than 96.23% of the companies listed in the same industry.
RCII's Dividend Yield is rather good when compared to the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.51% |
5.2 History
RCII has been paying a dividend for at least 10 years, so it has 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
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%
RENT-A-CENTER INC
NASDAQ:RCII (2/24/2023, 7:00:01 PM)
After market: 26.09 -0.69 (-2.58%)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 Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap1.49B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.51% |
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)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
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)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
Avg Revenue beat(16)
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 | 6.85 | ||
| Fwd PE | 7.67 | ||
| 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)0.14
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.71% | ||
| ROE | 3.56% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 6.93% | ||
| PM (TTM) | 0.44% | ||
| GM | 48.63% | ||
| 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 Turnover1.6
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.5 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.88 | ||
| Quick Ratio | 0.46 | ||
| 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)-28.91%
EPS 3Y75.31%
EPS 5Y
EPS growth Q2Q
EPS Next Y-34.02%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)7.21%
Revenue growth 3Y19.88%
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