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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Rent-A-Center, Inc. (XNAS:RCII) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
RCII
Name:
RENT-A-CENTER, INC. (XNAS:RCII)
Sector:
188.89M
Industry:
Rental & Leasing Services
CEO:
Mr. Mitchell Fadel
Total Employees:
14,290
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -87.91% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF RENT-A-CENTER, INC.(RCII) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND RENTAL & LEASING SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
25.32
One Month Price Target:
$25.55
Six Month Price Target :
$26.71
Likely Price in One Year's Time:
Ticker:
$28.09
Likely Trading Range Today Under (Normal Volatility)
$25.18
Price Upper limit ($) :
$25.49
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$23.44
This week:
$21.11
This month :
$16.89
Other Primary facts
Market Cap:
1.50B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
59.20M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
18.48%
-18.4%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$34.06
$30.06
$16.58
$20.58
Medium risk (<10%) entry points
Buy Call
Sell Call
$28.76
Buy Put:
Sell Put:
$27.90
$21.87
$22.74
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
RCII
Sharpe Ratio:
1.22%
Comparison:
RCII, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -59.36% lower than the industry
& is -46.55% lower than the market/S&P 500 average
Average Returns/Yield of
RCII
Daily returns:
0.05%
Weekly returns:
0.27%
Monthly returns:
1.07%
Yearly returns:
31.25%
Comparison of returns:
Average annual returns/yield (last 3 years) is -59.06% below industry average
Classification:
RCII, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.91
Statistical test of Returns:
RCII has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.65%
Weekly Volatility:
8.16%
Monthly Volatility:
16.32%
Yearly Volatility:
56.54%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.03%
Volatility in last five trading days has been -71.78% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.44%
Weekly VaR:
-16.64%
Monthly VaR:
-33.28%
How Much Can the price of
RCII
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-29%
Worst case (decline):
>85%
This translates to price declining to:
$18.02
This translates to price declining to:
$3.80
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
RCII is a 134.89% riskier investment compared to the market/S&P 500 & is 101.23% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -0.89% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
RCII
Beta in relation to market/S&P 500--1.63
Expected beta in 1 year's time:
1.281
Expected beta in 3 year's time:
1.812
Unlevered (debt free) Beta:
0.527
Beta in relation to Nasdaq (XNAS):
0.954
Beta in relation to all global stocks::
0.844
Beta Comparison & Analysis
Beta of competitors/peers::
1.459
Beta is 11.71% higher than peers
Average Industry Beta:
1.628
Beta is 0.10% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
14.26%
Sustainable growth rate is 18.13% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.015
Alpha is -108.97% below industry average alpha yield
Alpha is -97% below the market average
Analysis of Cost of Capital of
RCII
Equity cost of capital:
0.143
Equity cost of capital is 0.08% above industry mean WACC
Unlevered (without debt) cost of capital:
4.63%
Before-tax cost of debt:
4.58%
After-tax cost of debt:
3.61%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.61%
WACC is 1.46% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$79.50
Revenue growth rate per share of (3Y):
2.87
Annual revenue growth rate is 156.44% above the industry average
EPS:
$1.29
Expected Annual growth rate of EPS (3Y):
-14.13%
Expected future EPS growth rate is -222.38% lower than the Rental & Leasing Services industry
Free cash flow (FCF) per share:
$7.22
-
-
Debt per share
$28.74
EBITDA per share
$28.77
Valuation Analysis Today of
RCII
P/E Ratio:
35.43
P/E Ratio of Competitors/Peers:
62.16
P/E ratio is -42.99% lower than main peers & is 96.53% higher than the industry
Stock price/value with industry average P/E ratio: $23.26
RCII is 8.87% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $24.43
Present value of the expected future dividends only: $10.68
P/S (Price to Sales ratio):
0.32
Price to sales ratio is -83.08% below the industry mean
P/B (Price to book value ratio):
2.87
Price to free cash flow: 3.50
-
Net income growth rate (3Y):
1389.26%
Net income growth rate is 509.70% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 23.94%
Dividend yeild: 5.25%
Previous Dividend: $0.34
Previous adjusted dividend: $0.34
Previous Dividend: $1.33
Expected next dividend best case: $0.36
Expected next dividend worst case: $0.32
Average dividend payment (long-term): $0.31
Average dividend increase/decrease (growth rate) % per period: 1.66%
Expected next dividend payment date: 10/10/2022
Expected next dividend record date: 19/09/2022
-
Previous dividend payment date: 07/12/2022
Previous dividend record date: 21/06/2022
-
Dividend History:
2022-06-17--$0.34
2021-12-15--$0.34
2021-06-21--$0.31
2022-04-04--$0.34
2021-09-27--$0.31
2021-04-05--$0.31
Dividend growth rate is -528.98% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
325.32%
Net debt to equity ratio:
307.03%
Debt to assets ratio:
61.27%
Net debt to assets ratio:
57.83%
Debt-to-asset ratio is -18.16% below industry average
Ability to repay debt:
Interest coverage ratio:
21.88
Interest coverage ratio is -155.03% less than industry average
Looking forward:
Debt growth rate:
51.12%
Annual debt growth is 144% higher than industry average debt growth rate
Debt repayment rate in last quarter: 9.19%
Analysis of Key Statistics
Correlation of price movement with the market:
0.538
Statistical significance of correlation:
RCII has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.547
Stock price is -1.68% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.547
Correlation of price movement with Nasdaq (^IXIC):
-0.026
Covariance of price movement with the market:
-0.054
Kurtosis
4.523
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.27
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
RCII
Gross Profit Margin Ratio:
193%
Operating Profit Margin Ratio:
4.71%
Operating profit margin is -51.67% lower than the industry
Net Profit Margin Ratio:
193%
Effective Tax Rate:
35.67%
Effective tax rate is 56.89% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
16.85%
Return on equity (ROE) is -135.13% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.17%
Return on assets (ROA) is -19.27% lower than the industry
Financial Leverage:
2.6x
Current Ratio:
0.49
Current ratio is -61.65% below industry average
Cash Conversion Cycle (days):
-6.3
Cash conversion cycle is -128.76% below industry average
The remaining useful life of property plant & equipment is: 2.3 years
Stock based compensation to net income ratio:
46.98%
In-depth Efficiency Analysis
Revenue generated per employee:
329.3K
Each employee generates -86% less revenue than industry average revenue per employee
EBITDA generated per employee:
119.2K
Each employee generates -100% less EBITDA than industry average revenue per employee
Profit generated per employee:
6.2K
Each employee generates -100% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
13.2K
Each employee generates -94% less free cash flow than industry average revenue per employee
Assets/Capital per employee
178.8K
Each employee generates -94% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
RCII
FORWARD AIR CORPORATION (XNAS:FWRD)
WERNER ENTERPRISES, INC. (XNAS:WERN)
FRONTIER GROUP HOLDINGS, INC. (XNAS:ULCC)
HELIOS TECHNOLOGIES, INC. (XNYS:HLIO)
MERCURY SYSTEMS, INC. (XNAS:MRCY)
ALLEGIANT TRAVEL COMPANY (XNAS:ALGT)
ALTRA INDUSTRIAL MOTION CORP. (XNAS:AIMC)
Enovix Corporation (XNAS:ENVX)
ADVANCED ENERGY INDUSTRIES, INC. (XNAS:AEIS)
Current Analyst Ratings
Strong buy�13%
Buy�0%
Hold�21%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
4.71B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
2.44B
2.27B
-
856.83M
856.83M
-
1.19B
2.05B
192.00K
77.85M
1.49B
1.70B
221.54M
88.15M
137.04M
48.88M
88.15M
Statement of Cash Flow
Date:
Period:
368.06M
Differed Income Tax :
- 16607.00K
Stock Based Compensation :
41.41M
Change in Working Capital :
- 194210.00K
Accounts Receivables:
-
Other Working Capital:
- 3259.00K
Other Non-Cash Items:
10.88M
Net Cash Provided by Operating Activities:
205.29M
Investments in PP&E:
- 16403.00K
Net Acquisitions:
- 324.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
95.68M
-
95.68M
121.19M
-
5.41M
222.28M
1.75B
289.76M
402.83M
-
68.63M
47.46M
2.55B
-
2.78B
130.72M
-
-
-
323.86M
454.58M
1.70B
-
1.80B
-
2.25B
1.07M
1.12B
- 11710.0K
-
March 31, 2022 at 6:00:00 AM
4.48B
523.06M
2.78B
-
1.70B
1.6B
-
6.00K
- 16721.00K
- 172188.00K
-
- 8467.00K
- 21105.00K
477.00K
- 201283.00K
64.00K
- 12649.00K
95.68M
108.33M
205.29M
- 16403.00K
188.89M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
RCII
2023
2024
2025
2026
2027
$28.23
$49.47
$54.88
$60.89
$67.56