Rent-A-Center (RCII) Shares Down 6.5% Following Weak Earnings

Rent-A-Center Inc (NASDAQ:RCII) traded down 6.5% during mid-day trading on Tuesday following a weaker than expected earnings announcement. The company traded as low as $8.86 and last traded at $8.93. 2,301,232 shares traded hands during trading, an increase of 35% from the average session volume of 1,699,980 shares. The stock had previously closed at $9.55.

The company reported ($0.41) earnings per share for the quarter, missing the consensus estimate of ($0.07) by ($0.34). Rent-A-Center had a negative return on equity of 11.57% and a net margin of 0.25%. The business had revenue of $638.95 million for the quarter, compared to analyst estimates of $654.55 million. During the same period last year, the business posted ($0.23) EPS. Rent-A-Center’s revenue was down 6.6% on a year-over-year basis.

Several equities research analysts have recently weighed in on the company. BidaskClub raised Rent-A-Center from a “sell” rating to a “hold” rating in a research report on Wednesday, December 6th. ValuEngine lowered Rent-A-Center from a “hold” rating to a “sell” rating in a research report on Wednesday, January 24th. Zacks Investment Research lowered Rent-A-Center from a “hold” rating to a “sell” rating in a research report on Wednesday, November 15th. Loop Capital set a $8.00 target price on Rent-A-Center and gave the stock a “sell” rating in a research report on Wednesday, January 17th. Finally, Raymond James Financial reissued a “market perform” rating on shares of Rent-A-Center in a research report on Wednesday, October 25th. Four equities research analysts have rated the stock with a sell rating, four have assigned a hold rating and two have assigned a buy rating to the company. Rent-A-Center has an average rating of “Hold” and an average target price of $10.93.

Large investors have recently added to or reduced their stakes in the stock. Royce & Associates LP grew its stake in Rent-A-Center by 10.6% during the 3rd quarter. Royce & Associates LP now owns 417,518 shares of the company’s stock worth $4,793,000 after buying an additional 40,000 shares during the last quarter. Macquarie Group Ltd. purchased a new position in Rent-A-Center during the 3rd quarter worth approximately $404,000. Wells Fargo & Company MN grew its stake in Rent-A-Center by 43.9% during the 3rd quarter. Wells Fargo & Company MN now owns 69,603 shares of the company’s stock worth $800,000 after buying an additional 21,232 shares during the last quarter. Frontier Capital Management Co. LLC grew its stake in Rent-A-Center by 2.2% during the 3rd quarter. Frontier Capital Management Co. LLC now owns 3,215,402 shares of the company’s stock worth $36,913,000 after buying an additional 68,605 shares during the last quarter. Finally, Commonwealth of Pennsylvania Public School Empls Retrmt SYS purchased a new position in Rent-A-Center during the 3rd quarter worth approximately $1,722,000.

The company has a debt-to-equity ratio of 2.69, a current ratio of 2.55 and a quick ratio of 0.46.

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About Rent-A-Center

Rent-A-Center, Inc is a rent-to-own operator in North America. The Company provides an opportunity to obtain ownership of products, such as consumer electronics, appliances, computers (including tablets), smartphones and furniture (including accessories), under rental purchase agreements. The Company operates in four segments: Core U.S., Acceptance Now, Mexico, and Franchising.

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