Are Investors Undervaluing Rent-A-Center (RCII) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Rent-A-Center (RCII). RCII is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 10.15, which compares to its industry's average of 14.35. Over the last 12 months, RCII's Forward P/E has been as high as 36.83 and as low as 8.95, with a median of 14.40.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. RCII has a P/S ratio of 0.4. This compares to its industry's average P/S of 1.06.
These are only a few of the key metrics included in Rent-A-Center's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, RCII looks like an impressive value stock at the moment.
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Rent-A-Center, Inc. (RCII) : Free Stock Analysis Report
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