October 12, 2017

RCII – Market expectations are for recovering Uniform ROA, and management’s confidence about growth opportunities and same-store sales implies this may be warranted


  • Rent-A-Center, Inc. (RCII:USA) currently trades near historical lows relative to UAFRS-based (Uniform) Assets, with a 1.0x Uniform P/B. However, even at these levels, the market has bullish expectations for the firm, which may be warranted, given management’s confidence about growth opportunities and same-store sales
  • Specifically, management is confident about their efforts to capitalize on strong growth opportunities in Acceptance Now and e-commerce, and that they will continue to improve core same-store sales in the third quarter. As such, expectations for Uniform ROA to recover from historical lows appear warranted, and equity is likely fairly valued

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