Upbound Group (NASDAQ:UPBD) Releases Earnings Results, Beats Expectations By $0.10 EPS

Upbound Group (NASDAQ:UPBD) announced its quarterly earnings results on Thursday. The company reported $1.01 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.91 by $0.10, Zacks reports. The company had revenue of $1.15 billion for the quarter, compared to analysts’ expectations of $1.12 billion. Upbound Group had a net margin of 1.90% and a return on equity of 34.53%. Upbound Group’s quarterly revenue was down 1.3% on a year-over-year basis. During the same quarter in the previous year, the company earned $1.00 earnings per share.

Here are the key takeaways from Upbound Group’s conference call:

• Upbound exceeded Q3 guidance, reporting $1.15 billion in revenue, $123 million in adjusted EBITDA, and $1.01 in non-GAAP EPS. Management narrowed full-year guidance and raised the midpoint of its EPS outlook to $4.23.
• Acima prioritized profitability over volume; GMV fell 11% and revenue declined 6.5%, but adjusted EBITDA rose 15% to $86 million as lease charge-offs improved to 8.7% and margins expanded 270 basis points. Management expects Q4 GMV to be roughly flat year over year, supported by improving monthly trends and the planned Boost Mobile integration.
• Brigit remained a major growth driver, with revenue up 37%, paying users up 27% to 1.84 million, and adjusted EBITDA up 59% to $15 million. The Experian partnership is gaining users, while the company is cautiously expanding its line-of-credit pilot.
• Rent-A-Center delivered its fourth consecutive quarter of positive same-store sales growth, up 1.8%, and sequential EBITDA improved 4.9%. However, adjusted EBITDA remained down year over year, and store optimization is expected to keep full-year revenue flat to down low single digits.
• Cash generation and balance-sheet improvement were strong, with Q3 free cash flow more than doubling to $121 million, leverage falling to 2.4x, and more than $225 million of debt repaid since year-end. Upbound also plans to repurchase up to $50 million of shares, although expected legal settlement payments will reduce full-year free cash flow relative to operating cash flow.

Upbound Group Price Performance

Shares of UPBD stock traded up $2.54 during trading hours on Thursday, hitting $19.45. The stock had a trading volume of 1,590,251 shares, compared to its average volume of 914,733. The stock’s 50-day moving average price is $17.18 and its two-hundred day moving average price is $18.87. Upbound Group has a one year low of $14.98 and a one year high of $23.98. The stock has a market capitalization of $1.13 billion, a price-to-earnings ratio of 12.61 and a beta of 1.78. The company has a debt-to-equity ratio of 1.94, a current ratio of 3.22 and a quick ratio of 0.97.

Upbound Group Dividend Announcement

The business also recently declared a quarterly dividend, which was paid on Tuesday, October 27th. Shareholders of record on Tuesday, October 6th were paid a $0.39 dividend. The ex-dividend date was Tuesday, October 6th. This represents a $1.56 annualized dividend and a yield of 8.0%. Upbound Group’s payout ratio is presently 101.30%.

Insider Transactions at Upbound Group

In other news, EVP Anthony Blasquez sold 10,000 shares of the stock in a transaction that occurred on Friday, August 21st. The stock was sold at an average price of $18.85, for a total transaction of $188,500.00. Following the completion of the transaction, the executive vice president directly owned 43,717 shares in the company, valued at approximately $824,065.45. This represents a 18.62% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. 1.20% of the stock is currently owned by insiders.

Analyst Upgrades and Downgrades

Several brokerages recently weighed in on UPBD. TD Cowen reduced their price target on shares of Upbound Group from $28.00 to $27.00 and set a “buy” rating for the company in a research report on Tuesday, October 6th. Weiss Ratings lowered Upbound Group from a “hold (c)” rating to a “hold (c-)” rating in a report on Monday, September 21st. BTIG Research cut Upbound Group from a “buy” rating to a “neutral” rating and set a $28.00 price objective for the company. in a research report on Friday, July 31st. Wall Street Zen cut Upbound Group from a “buy” rating to a “hold” rating in a research report on Saturday, October 24th. Finally, Zacks Research upgraded shares of Upbound Group from a “strong sell” rating to a “hold” rating in a research note on Monday, September 28th. One equities research analyst has rated the stock with a Buy rating and three have given a Hold rating to the company’s stock. Based on data from MarketBeat, Upbound Group has a consensus rating of “Hold” and a consensus price target of $27.50.

Upbound Group Company Profile

Upbound Group, Inc is a provider of consumer leasing and retail solutions, operating primarily through its Rent-A-Center and Acima brands. The company enables customers to obtain merchandise through flexible lease-to-own agreements and related payment options, serving consumers who may prefer alternatives to traditional retail financing.

Its Rent-A-Center business operates company-owned and franchised locations, as well as digital channels, offering furniture, appliances, electronics, computers, smartphones and other household goods.