Rent-A-Center: The Market Neglects The Great Price Appreciation Opportunity

Mar. 29, 2021 3:03 PM ETUpbound Group, Inc. (UPBD) StockUPBD9 Comments

Summary

  • The Acima acquisition brings growth opportunities for the company.
  • A DCF model shows about 30% undervaluation.
  • Current dividend yield of 2.09% is pretty safe, considering the fact that the payout ratio is less than 30%.
Rent due reminder on calendar
Photo by Hemera Technologies/AbleStock.com via Getty Images

Rent-A-Center (RCII) acquired Acima in February 2021. The acquisition will increase revenues significantly and improve margins. It seems that the market is neglecting the benefits of the acquisition as the stock is significantly undervalued considering DCF model, historic multiples of the company, and sector multiples.

This article was written by

I am an equity research analyst looking for the highest quality value and growth opportunities. I do prefer those industries which have a promising outlook and are expected to grow at an above-average rate.Associated with another SA contributor Growth Analyst.

Analyst’s Disclosure:I/we have no positions in any stocks mentioned, but may initiate a long position in RCII over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

About UPBD Stock

SymbolLast Price% Chg
Market Cap
PE
Yield
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on UPBD

Related Stocks

SymbolLast Price% Chg
UPBD
--