Upbound Group (UPBD) AI Stock Analysis

• Market Cap: $1.37B
• Dividend Yield: 6.42%
• Average Volume (3M): 601.20K
• Price to Earnings (P/E): 11.1
• Beta (1Y): 1.13
• Revenue Growth: 8.07%
• EPS Growth: N/A
• Country: US
• Employees: 11,970
• Sector: Technology
• Sector Strength: 65
• Industry: Software - Application
• EPS (TTM): 1.00
• Shares Outstanding: 57,825,535
• 10 Day Avg. Volume: 670,375
• 30 Day Avg. Volume: 601,199
• PEG Ratio: -3.47
• Price to Book (P/B): 1.91
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.90
• Enterprise Value/Market Cap: 2.24
• Enterprise Value/Revenue: 0.18
• Enterprise Value/Gross Profit: 1.77
• Enterprise Value/Ebitda: 2.15
• 1Y Price Target: $35.00
• Price Target Upside: 34.20% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

Upbound Group's stock score is driven by its solid financial performance, particularly strong cash flow generation and revenue growth. The company's valuation is attractive, supported by a low P/E ratio and high dividend yield. The positive sentiment from the latest earnings call further boosts the outlook. However, technical indicators suggest some caution due to potential downward momentum.

Positive Factors

Earnings Performance

UPBD reported 1Q EPS of $1.00, above estimate of $0.92 and consensus of $0.95.

Revenue Lines

UPBD beat consensus on major revenue line in rentals & fees and merchandise sales.

Valuation

UPBD shares are considered very cheap with 54% upside potential to a target price based on a higher price-to-earnings multiple.

Negative Factors

Cost Challenges

The beat in revenues was more than offset by higher cost of revenue, particularly in cost of rentals and fees and cost of merchandise sold.

Guidance

UPBD introduced initial 2025 guidance that is slightly below consensus on EPS, revenue and EBITDA.

Leadership Concerns

Some investors worry that the retirement announcement of CEO Mitch Fidel, immediately following the recent Brigit acquisition and a tough consumer credit environment, implies concerns about the near-term future of Upbound.

Upbound Group Business Overview & Revenue Model

Company Description

Upbound Group, Inc., an omni-channel platform company, leases household durable goods to customers on a lease-to-own basis in the United States, Puerto Rico, and Mexico. The company operates in four segments: Rent-A-Center Business, Acima, Mexico, and Franchising. The company's brands, such as Rent-A-Center and Acima that facilitate consumer transactions across a range of store-based and virtual channels. It offers furniture comprising mattresses, tires, consumer electronics, appliances, tools, handbags, computers, smartphones, and accessories. The company also provides merchandise on an installment sales basis; and the lease-to-own transaction to consumers who do not qualify for financing from the traditional retailer through kiosks located within retailer's locations. It operates retail installment sales stores under the Get It Now and Home Choice names; lease-to-own and franchised lease-to-own stores under the Rent-A-Centre, ColorTyme, and RimTyme names; and company-owned stores and e-commerce platform through rentacenter.com. The company was formerly known as Rent-A-Center, Inc. and changed its name to Upbound Group, Inc. in February 2023. Upbound Group, Inc. was founded in 1960 and is headquartered in Plano, Texas.

How the Company Makes Money

Upbound Group makes money primarily through interest and fees generated from its credit and leasing services. Its revenue streams include interest income from loans provided to consumers and businesses, leasing fees from rental agreements, and service fees for financial education and consultancy services. The company may also form strategic partnerships with retailers and other financial institutions to expand its market reach and enhance its service offerings, which can contribute to its earnings.

Upbound Group Financial Statement Overview

Summary

Upbound Group shows positive financial performance with strong cash flow metrics and steady revenue growth. The company maintains a solid gross profit margin, and its effective use of equity is reflected in a good ROE. However, the low net profit margin and moderate equity ratio highlight potential risks due to high leverage and non-operating expenses.

Income Statement

The company has shown a solid gross profit margin of 39.45% and a net profit margin of 2.74% over the TTM period. Revenue growth is positive at 1.86% compared to the previous year, indicating steady growth. The EBIT margin stands at 6.87%, while the EBITDA margin is slightly higher at 6.94%. However, the net profit margin is relatively low, which may indicate challenges in controlling non-operating expenses.

Balance Sheet

The debt-to-equity ratio is 0.41, reflecting a manageable level of leverage. Return on equity (ROE) is 17.75%, indicating effective use of equity to generate profits. The equity ratio is 22.32%, showing a moderate level of equity financing. Although the company has a solid ROE, the high level of liabilities relative to equity could pose some risk.

Cash Flow

Free cash flow growth is strong at 331.09% compared to the previous year, signaling robust cash generation. The operating cash flow to net income ratio is 1.63, which indicates good cash flow relative to net income. Additionally, the free cash flow to net income ratio is 1.73, demonstrating strong cash flow generation capabilities relative to earnings.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
4.40B	4.32B	3.99B	4.25B	4.58B	2.81B
	Gross Profit
1.74B	2.08B	1.28B	2.08B	2.24B	1.67B
	EBIT
302.51M	291.63M	162.87M	148.54M	280.54M	237.34M
	EBITDA
305.45M	339.01M	290.54M	283.05M	435.01M	294.77M
	Net Income Common Stockholders
120.58M	123.48M	-5.18M	12.36M	134.94M	208.12M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
84.79M	60.86M	93.70M	144.14M	108.33M	159.45M
	Total Assets
2.63B	2.65B	2.72B	2.76B	2.99B	1.75B
	Total Debt
1.58B	1.58B	1.60B	305.56M	296.54M	285.35M
	Net Debt
1.49B	1.52B	1.51B	161.41M	188.20M	125.91M
	Total Liabilities
2.05B	2.02B	2.16B	2.24B	2.48B	1.16B
	Stockholders Equity
578.29M	628.98M	560.37M	525.15M	513.28M	592.08M
Cash Flow		Free Cash Flow
198.28M	48.45M	146.89M	407.07M	329.85M	201.96M
	Operating Cash Flow
197.04M	104.72M	200.29M	468.46M	392.30M	236.50M
	Investing Cash Flow
-315.23M	-41.51M	-50.96M	-62.33M	-1.34B	-20.61M
	Financing Cash Flow
143.48M	-93.52M	-202.12M	-370.71M	892.85M	-126.68M

Upbound Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 26.08
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UPBD, the sentiment is Positive. The current price of 26.08 is above the 20-day moving average (MA) of 21.90, above the 50-day MA of 22.94, and below the 200-day MA of 28.27, indicating a neutral trend. The MACD of 0.50 indicates Negative momentum. The RSI at 67.22 is Neutral, neither overbought nor oversold. The STOCH value of 85.38 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for UPBD.

Upbound Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UPBD	76 Outperform	$1.37B	11.07	19.18%	6.42%	8.07%	―
NABL	75 Outperform	$1.48B	90.13	2.20%	―	7.98%	-40.59%
AMPL	72 Outperform	$1.57B	―	-32.87%	―	8.56%	-4.21%
FORTY	71 Outperform	$1.47B	18.66	12.21%	1.17%	3.51%	18.34%
MLNK	63 Neutral	$1.34B	―	-6.36%	―	4.18%	27.11%
Sector *	60 Neutral	$11.39B	10.50	-6.42%	2.97%	7.77%	-11.17%
VYX	45 Neutral	$1.53B	―	-19.49%	―	-50.48%	-15.75%

Upbound Group Corporate Events

Upbound Group Reports Q1 2025 Financial Results

On May 1, 2025, Upbound Group, Inc. reported its financial results for the first quarter ending March 31, 2025, with a total revenue of $1,176 million. The company achieved a GAAP diluted EPS of $0.42 and a non-GAAP diluted EPS of $1.00. These results reflect the company’s strategic focus on leveraging technology and data to cater to the evolving needs of underserved consumers, potentially enhancing its market position and providing valuable insights for stakeholders.

Spark’s Take on UPBD Stock

According to Spark, TipRanks’ AI Analyst, UPBD is a Outperform.

Upbound Group’s overall stock score reflects its solid financial performance and strategic acquisitions, offset by technical weaknesses and challenges in certain business segments. The low valuation and high dividend yield provide some investment appeal, while recent corporate developments enhance future growth prospects.

To see Spark’s full report on UPBD stock, click here.

Upbound Group Announces CEO Retirement and Successor

On February 20, 2025, Upbound Group announced the retirement of CEO Mitchell E. Fadel effective June 1, 2025, with CFO Fahmi Karam succeeding him. Mr. Karam’s appointment reflects a strategic shift, leveraging his extensive background in finance and operations to guide the company forward. This leadership change coincides with the release of Upbound’s 2024 financial results, reporting a total revenue of $4.3 billion and a GAAP diluted EPS of $2.21 for the year, indicating a robust performance in its financial solutions market. The transition aims to strengthen Upbound’s industry position and enhance value for stakeholders.