Rent-A-Center Inc. (RCII) Downgraded to “Strong Sell” at Zacks Investment Research
Rent-A-Center Inc. (NASDAQ:RCII) was downgraded by Zacks Investment Research from a “hold” rating to a “strong sell” rating in a note issued to investors on Thursday.
According to Zacks, “Rent-A-Center disappointed investors with its bleak preliminary guidance for third-quarter 2016. The company now expects Core U.S. same store sales to be down nearly 12% in the quarter while Acceptance Now same store sales is estimated to be flat. Core U.S. gross profit is likely to be flat year over year. The company anticipates earnings per share both on the GAAP and non-GAAP basis to be in the range of $0.05 to $0.15 per share. The technical snags and outages after the execution of new point-of-sale system negatively impacted Core sales and compelled management to hold a conservative view. Moreover, Rent-A-Center has been disappointing investors with its top-line performance for the past four consecutive quarters. Accelerated point of sale system rollout, persistent sluggishness across the computers and tablets categories, headwinds across the oil-impacted markets and continued smartphones recast impacted the results.”
Separately, Jefferies Group began coverage on shares of Rent-A-Center in a research report on Thursday. They issued a “hold” rating for the company. One analyst has rated the stock with a sell rating, two have issued a hold rating, three have assigned a buy rating and one has assigned a strong buy rating to the company. The stock currently has a consensus rating of “Buy” and an average price target of $22.72.
Shares of Rent-A-Center (NASDAQ:RCII) opened at 9.55 on Thursday. The stock’s 50 day moving average is $12.38 and its 200-day moving average is $13.00. Rent-A-Center has a 52-week low of $8.00 and a 52-week high of $26.26. The firm’s market capitalization is $507.26 million.
Rent-A-Center (NASDAQ:RCII) last posted its quarterly earnings data on Wednesday, July 27th. The company reported $0.41 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.49 by $0.08. The company earned $749.60 million during the quarter, compared to the consensus estimate of $782.12 million. Rent-A-Center had a negative net margin of 27.93% and a positive return on equity of 14.03%. The company’s revenue was down 8.1% on a year-over-year basis. During the same quarter last year, the business earned $0.50 earnings per share. On average, equities analysts forecast that Rent-A-Center will post $1.73 earnings per share for the current fiscal year.
The business also recently announced a quarterly dividend, which will be paid on Thursday, October 20th. Shareholders of record on Monday, October 3rd will be given a $0.08 dividend. The ex-dividend date is Thursday, September 29th. This represents a $0.32 dividend on an annualized basis and a yield of 3.35%. Rent-A-Center’s payout ratio is -1.93%.
In related news, CEO Robert Dale Davis bought 10,000 shares of the business’s stock in a transaction on Monday, August 1st. The stock was bought at an average price of $10.87 per share, for a total transaction of $108,700.00. Following the transaction, the chief executive officer now directly owns 131,850 shares in the company, valued at $1,433,209.50. The transaction was disclosed in a legal filing with the SEC, which is available through this hyperlink. 3.40% of the stock is currently owned by company insiders.
Hedge funds and other institutional investors have recently made changes to their positions in the company. Los Angeles Capital Management & Equity Research Inc. acquired a new position in shares of Rent-A-Center during the first quarter valued at approximately $338,000. Prudential Financial Inc. raised its position in shares of Rent-A-Center by 174.8% in the first quarter. Prudential Financial Inc. now owns 212,937 shares of the company’s stock valued at $3,375,000 after buying an additional 135,446 shares during the period. BlackRock Group LTD raised its position in shares of Rent-A-Center by 13.0% in the first quarter. BlackRock Group LTD now owns 81,983 shares of the company’s stock valued at $1,301,000 after buying an additional 9,402 shares during the period. BlackRock Fund Advisors raised its position in shares of Rent-A-Center by 32.7% in the first quarter. BlackRock Fund Advisors now owns 3,318,496 shares of the company’s stock valued at $52,598,000 after buying an additional 817,206 shares during the period. Finally, Royce & Associates LP raised its position in shares of Rent-A-Center by 16.5% in the first quarter. Royce & Associates LP now owns 939,879 shares of the company’s stock valued at $14,897,000 after buying an additional 133,000 shares during the period. Institutional investors own 9.58% of the company’s stock.
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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