Rent-A-Center Inc Got Some Bad News

By Austin Angelo

Loop Capital Markets analyst Anthony Chukumba downgraded Rent-A-Center Inc (NASDAQ: RCII) to Sell today and set a price target of $8. The company’s shares closed yesterday at $12.94, close to its 52-week high of $13.73.

According to, Chukumba is a 2-star analyst with an average return of 0.5% and a 55.6% success rate. Chukumba covers the Services sector, focusing on stocks such as Restoration Hardware Holdings Inc, Container Store Group, and Bed Bath & Beyond.

Currently, the analyst consensus on Rent-A-Center Inc is Hold and the average price target is $11.70, representing a -9.6% downside.

In a report issued on May 30, Stephens also maintained a Sell rating on the stock.

Based on Rent-A-Center Inc’s latest earnings report for the quarter ending March 31, the company posted quarterly revenue of $742 million and GAAP net loss of $6.68 million. In comparison, last year the company earned revenue of $836 million and had a net profit of $25.06 million.

Based on the recent corporate insider activity of 17 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of RCII in relation to earlier this year. Last month, Mark Speese, a Director at RCII bought 100,000 shares for a total of $1,169,000.

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Rent-A-Center, Inc. engages in leasing household durable goods to customers on a rent-to-own basis. The company provides the customers the ownership of products, such as consumer electronics, appliances, computers, furniture and accessories, under rental purchase agreements with no long-term obligation. Its stores offer durable products such as major consumer electronics, appliances, computers, and furniture and accessories under flexible rental purchase agreements that typically allow the customer to obtain ownership of the merchandise at the conclusion of an agreed-upon rental period. The company operates its business through the following segments: Core U.S., Acceptance Now, Mexico and Franchising. The Core U.S. segment consists of company-owned rent-to-own stores in the United States, Canada and Puerto Rico that lease household durable goods to customers on a rent-to-own basis. The Acceptance Now segment offers the rent-to-own transaction to consumers who do not qualify for financing from the traditional retailer through kiosks located within such retailer’s locations. The Mexico segment consists of its company-owned rent-to-own stores in Mexico that lease household durable goods to customers on a rent-to-own basis. The Franchising segment use Rent-A-Center’s, ColorTyme’s and RimTyme’s trade names, service marks, trademarks and logos, and operate under distinctive operating procedures and standards. Rent-A-Center was founded by Mark E. Speese on September 16, 1986 and is headquartered in Plano, TX.