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Aaron's: I Believe My Thesis Was Correct - Moving On To Q1 2023

May 30, 2023 5:27 PM ETThe Aaron's Company, Inc. (AAN)3 Comments


  • Aaron's is a market leader in the lease-to-own segment, specifically in furniture, electronics, appliances, and other home goods, and this is the second time I review it.
  • The company has solid gross margins, operating margins, and ROCE, ROE, and ROIC trends, but is currently overvalued and faces risks if the economic downturn lasts longer than expected.
  • I'm currently maintaining a "hold" rating on AAN, with a price target of $10/share, as the risk/reward is unfavorable at its current price.
  • Looking for more investing ideas like this one? Get them exclusively at iREIT on Alpha. Learn More »

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Dear readers/followers,

In this article, I'll be updating my thesis on Aaron's (NYSE:AAN). This is an interesting company because it's market-leading in an appealing segment - namely the lease-to-own segment, and specifically in the categories of furniture, electronics, appliances, and other

The company discussed in this article is only one potential investment in the sector. Members of iREIT on Alpha get access to investment ideas with upsides that I view as significantly higher/better than this one. Consider subscribing and learning more here.

This article was written by

Wolf Report profile picture

Wolf Report is a senior analyst and private portfolio manager with over 10 years generating value ideas in European and North American markets.

He is a contributing author for the investing group iREIT on Alpha where in addition to the U.S. market, he covers the markets of Scandinavia, Germany, France, UK, Italy, Spain, Portugal and Eastern Europe in search of reasonably valued stock ideas. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of AAN either through stock ownership, options, or other derivatives. 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.

While this article may sound like financial advice, please observe that the author is not a CFA or in any way licensed to give financial advice. It may be structured as such, but it is not financial advice. Investors are required and expected to do their own due diligence and research prior to any investment. Short-term trading, options trading/investment and futures trading are potentially extremely risky investment styles. They generally are not appropriate for someone with limited capital, limited investment experience, or a lack of understanding for the necessary risk tolerance involved. I own the European/Scandinavian tickers (not the ADRs) of all European/Scandinavian companies listed in my articles. I own the Canadian tickers of all Canadian stocks I write about. Please note that investing in European/Non-US stocks comes with withholding tax risks specific to the company's domicile as well as your personal situation. Investors should always consult a tax professional as to the overall impact of dividend withholding taxes and ways to mitigate these.

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Comments (3)

Nicholas Sherr profile picture
Here we are at 10. I like the risk reward, but why the huge discount to Book? Thanks for your work.
I'm not sure how you could miss Upbound (UPBD) as a direct competitor that is, I believe, 2x the size of AAN in revenue. UPBD was formerly known as Rent-a-Center (RCII).
@Wolf Report thank you for reminding me about AAN… I’ve never owned it, but I love the business model! I’m adding it to my watch list and hoping to start a position if it falls into the range you suggested.
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