RCII - Rent-A-Center: Learn Why It Is Undervalued And Growing Significantly
- Rent-A-Center, Inc. offers ownership of furniture, computers, electronics, smartphones, and many other products, for which clients don’t have to pay in advance.
- In my view, if the company continues to invest in digital initiatives and e-commerce growth continues, sales will grow.
- I used a growth rate of 3% and a WACC of 13%, which is above that of other market analysts. The result is an equity valuation of $4.265 billion.
- RCII has an implied share price of $79. The current market valuation is $50-$54, so my DCF model implies an upside of more than 40% increase in the valuation.
- The downside potential in the valuation is not significant. In the worst case scenario, the DCF model resulted in an equity valuation of $46.2 per share.
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Rent-A-Center: Learn Why It Is Undervalued And Growing Significantly