Company Overview
Upbound Group, Inc. operates as a technology and data-driven entity that delivers financial solutions across the United States, Puerto Rico, and Mexico through its four primary segments: Acima, Rent-A-Center, Brigit, and Mexico. The business extends its product offerings beyond financial services to include the sale of furniture, mattresses, tires, and consumer electronics, integrating these physical goods with its financing capabilities. This organization functions within the Technology sector, specifically classified under the Software - Application industry, distinguishing it from traditional retail or financial institutions by its reliance on proprietary platforms and data analytics. The company demonstrates significant scale with a market capitalization of $1.05B, annual revenue reaching $4.70B, and an employee base of 12,050 individuals. These valuation and revenue figures indicate that Upbound Group, Inc. is a substantial market participant with a diversified operational footprint that allows it to manage risks associated with specific product categories or geographic regions while maintaining a large workforce to support its software and application infrastructure.
Financial Health
The company reports a trailing twelve-month revenue of $4.70B, accompanied by a net income of $73.24M and an EBITDA of $488.10M. The substantial disparity between the $4.70B revenue and the $73.24M net income reveals a cost structure where operational expenses and interest obligations consume a significant portion of earnings before taxes, resulting in a profit margin of only 1.6%. Despite the lower net income, the EBITDA of $488.10M suggests that the core operating cash generation before interest and taxes remains robust relative to the final bottom line. The firm generated free cash flow of $1.63B, which provides substantial financial flexibility to fund operations, reduce debt, or invest in technology without relying heavily on external financing. The gross margin stands at 48.4%, indicating efficient cost management for the cost of goods sold, while the operating margin of 9.5% reflects the effectiveness of overhead control. However, the profit margin of 1.6% highlights the pressure of non-operating expenses or interest costs on the final profitability. Regarding liquidity and solvency, the company holds $120.53M in cash against $1.86B in debt, resulting in a debt-to-equity ratio of 266.86% that characterizes a highly leveraged balance sheet. The current ratio is 2.52, indicating that current assets are more than double current liabilities, which suggests adequate short-term liquidity to meet obligations despite the high absolute debt load. Return on Equity is 11.1% and Return on Assets is 7.5%, metrics that reveal management's ability to generate returns on shareholder capital and total assets respectively, though the high leverage dilutes the ROA relative to the ROE.
Valuation Assessment
The stock carries a trailing P/E ratio of 14.46 and a forward P/E of 3.85. The significant difference between these two ratios implies that the market expects earnings to decline substantially in the near future, as the forward multiple is less than one-quarter of the trailing multiple. The price-to-book ratio is 1.50, indicating that the market values the company at 1.5 times its book value, suggesting a moderate premium over the net asset value rather than a deep discount or high premium. Alternative valuation metrics show a price-to-sales ratio of 0.22 and an EV/EBITDA of 5.71, which suggests the company is priced very cheaply relative to its sales and earnings power, potentially reflecting market concerns about the quality of earnings or future cash flow sustainability. The 52-week trading range spans from a low of $15.82 to a high of $28.03. Without a specific current price provided in the facts, the valuation context is defined by this wide range, where the stock has experienced significant volatility within a band of $12.21. The beta value is 1.84, meaning the stock price is expected to be 84% more volatile than the broader market, amplifying both potential gains and losses during periods of market movement.
Growth & Income
Revenue growth stands at 10.9% year-over-year, while earnings growth is -38.2% year-over-year. This divergence indicates that earnings are growing significantly slower than revenue, specifically declining, which implies that rising costs or one-time charges are eroding profitability despite top-line expansion. The company reports a dividend yield of 8.6% with a payout ratio of 124.8%. A payout ratio exceeding 100% is generally not sustainable from current earnings alone, as the company is paying out more in dividends than it generates in net income, relying instead on cash reserves or debt service to fund the dividend. This high payout ratio combined with negative earnings growth suggests the dividend may be at risk or supported by non-earnings cash flows rather than organic profitability. The overall growth and income profile presents a mixed picture of moderate revenue expansion and declining earnings, coupled with a high-yield dividend that is currently unsustainable based on reported net income figures.