On Friday, Upbound Group (NASDAQ:UPBD) stock received a positive outlook from BTIG with the initiation of coverage and a Buy rating, accompanied by a $45.00 price target.
The investment firm highlighted Upbound's strong performance in the Lease To Own (LTO) sector, particularly praising its top-line growth momentum and efficient operational execution.
BTIG expressed confidence in Upbound Group's potential to capture market share in the near-prime consumer finance space. The firm's analysts commended Upbound's management team and underscored the company's successful return to positive revenue growth. This uptick was noted in both its traditional Rent-A-Center (NASDAQ:UPBD) business and its Acima virtual LTO segment.
The firm is optimistic about the acceleration of growth in both the brick-and-mortar and virtual facets of Upbound's operations. BTIG's report specifically pointed out Acima's trend of securing substantial wins with regional merchants, suggesting a competitive edge in the market.
The investment firm's endorsement reflects a belief in Upbound Group's strategic positioning and its ability to outperform within the LTO industry. With the new price target set at $45.00, BTIG's coverage initiation signals a bullish stance on the company's stock performance moving forward.
In other recent news, Upbound Group has reported strong Q1 results for 2024, recording revenues close to $1.1 billion, an adjusted EBITDA of $109 million, and non-GAAP earnings per share of $0.79.
These positive results are attributed to an increase in merchant count, better performance of existing merchants, disciplined expense management, and a strong showing in direct-to-consumer e-commerce channels.
KeyBanc Capital Markets maintained its Overweight rating and a $41.00 price target for Upbound Group, citing the company's recent performance, accelerating Gross Merchandise Volume growth, and an upward trend in same-store sales.
Despite industry challenges, Upbound Group's guidance indicates a substantial increase in earnings per share growth for the second half of the year.
KeyBanc has expressed confidence in these projections, pointing to the company's attractive valuation metrics and positive business trajectory.
In addition, the Acima segment reported a 20% year-over-year GMV increase, and Rent-A-Center posted its first positive same-store sales growth in two years.
Despite a decrease in consolidated gross margin and a slight decline in consolidated adjusted EBITDA, Upbound Group remains optimistic about future growth. These are the recent developments in Upbound Group.
InvestingPro Insights
Following the positive outlook from BTIG, Upbound Group (NASDAQ:UPBD) showcases several financial metrics that investors may find compelling. With a market capitalization of $1.81 billion, the company is navigating through a period of significant transformation. Despite a negative P/E ratio over the last twelve months, analysts are forecasting a return to profitability for Upbound Group within the year. This anticipated shift is supported by the company's solid gross profit margin of 50.22% and an EBITDA growth of 71.6% during the same period, reflecting strong operational efficiency.
InvestingPro Tips also indicate that Upbound's stock price movements have been quite volatile, which may appeal to certain investors looking for dynamic trading opportunities. Additionally, it's reassuring to note that the company's liquid assets currently exceed its short-term obligations, providing financial flexibility. For those interested in further insights, there are additional InvestingPro Tips available that delve deeper into Upbound Group's financial health and market potential.
Investors may take advantage of these insights and more by exploring the comprehensive analysis provided by InvestingPro. For a more in-depth look at Upbound Group, visit https://www.investing.com/pro/UPBD, and don't forget to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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