Upbound Group (NASDAQ:UPBD) Announces Earnings Results, Beats Estimates By $0.10 EPS

Upbound Group (NASDAQ:UPBD) released its quarterly earnings results on Thursday. The company reported $1.01 earnings per share for the quarter, topping analysts’ consensus estimates of $0.91 by $0.10, Zacks reports. The company had revenue of $1.15 billion during the quarter, compared to analysts’ expectations of $1.12 billion. Upbound Group had a return on equity of 34.53% and a net margin of 1.90%. Upbound Group’s quarterly revenue was down 1.3% compared to the same quarter last year. During the same quarter in the prior year, the firm posted $1.00 EPS.

Here are the key takeaways from Upbound Group’s conference call:

• Upbound exceeded Q3 guidance, reporting $1.15 billion in revenue, $123 million in adjusted EBITDA, and $1.01 in non-GAAP EPS. Management narrowed full-year guidance and raised the midpoint of its EPS outlook to $4.23.
• Acima prioritized profitability over volume; GMV fell 11% and revenue declined 6.5%, but adjusted EBITDA rose 15% to $86 million as lease charge-offs improved to 8.7% and margins expanded 270 basis points. Management expects Q4 GMV to be roughly flat year over year, supported by improving monthly trends and the planned Boost Mobile integration.
• Brigit remained a major growth driver, with revenue up 37%, paying users up 27% to 1.84 million, and adjusted EBITDA up 59% to $15 million. The Experian partnership is gaining users, while the company is cautiously expanding its line-of-credit pilot.
• Rent-A-Center delivered its fourth consecutive quarter of positive same-store sales growth, up 1.8%, and sequential EBITDA improved 4.9%. However, adjusted EBITDA remained down year over year, and store optimization is expected to keep full-year revenue flat to down low single digits.
• Cash generation and balance-sheet improvement were strong, with Q3 free cash flow more than doubling to $121 million, leverage falling to 2.4x, and more than $225 million of debt repaid since year-end. Upbound also plans to repurchase up to $50 million of shares, although expected legal settlement payments will reduce full-year free cash flow relative to operating cash flow.

Upbound Group Price Performance

UPBD stock traded up $2.63 during mid-day trading on Thursday, reaching $19.54. The company’s stock had a trading volume of 1,809,085 shares, compared to its average volume of 915,312. The company has a current ratio of 3.22, a quick ratio of 0.97 and a debt-to-equity ratio of 1.94. The company’s 50 day moving average is $17.18 and its two-hundred day moving average is $18.87. Upbound Group has a fifty-two week low of $14.98 and a fifty-two week high of $23.98. The stock has a market cap of $1.14 billion, a PE ratio of 12.69 and a beta of 1.78.

Upbound Group Dividend Announcement

The firm also recently disclosed a quarterly dividend, which was paid on Tuesday, October 27th. Investors of record on Tuesday, October 6th were paid a dividend of $0.39 per share. This represents a $1.56 annualized dividend and a yield of 8.0%. The ex-dividend date of this dividend was Tuesday, October 6th. Upbound Group’s dividend payout ratio is currently 101.30%.

Analyst Upgrades and Downgrades

Several analysts have recently issued reports on UPBD shares. Weiss Ratings lowered shares of Upbound Group from a “hold (c)” rating to a “hold (c-)” rating in a research report on Monday, September 21st. TD Cowen reduced their price target on shares of Upbound Group from $28.00 to $27.00 and set a “buy” rating for the company in a research report on Tuesday, October 6th. Wall Street Zen lowered shares of Upbound Group from a “buy” rating to a “hold” rating in a research note on Saturday, October 24th. BTIG Research cut Upbound Group from a “buy” rating to a “neutral” rating and set a $28.00 price objective on the stock. in a report on Friday, July 31st. Finally, Zacks Research upgraded Upbound Group from a “strong sell” rating to a “hold” rating in a research note on Monday, September 28th. One investment analyst has rated the stock with a Buy rating and three have issued a Hold rating to the company’s stock. According to MarketBeat.com, the company presently has an average rating of “Hold” and an average target price of $27.50.

Insider Buying and Selling at Upbound Group

In other news, EVP Anthony Blasquez sold 10,000 shares of the company’s stock in a transaction that occurred on Friday, August 21st. The stock was sold at an average price of $18.85, for a total value of $188,500.00. Following the completion of the sale, the executive vice president directly owned 43,717 shares in the company, valued at $824,065.45. This represents a 18.62% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. 1.20% of the stock is currently owned by corporate insiders.

About Upbound Group

Upbound Group, Inc is a provider of consumer leasing and retail solutions, operating primarily through its Rent-A-Center and Acima brands. The company enables customers to obtain merchandise through flexible lease-to-own agreements and related payment options, serving consumers who may prefer alternatives to traditional retail financing.

Its Rent-A-Center business operates company-owned and franchised locations, as well as digital channels, offering furniture, appliances, electronics, computers, smartphones and other household goods.