Aaron's (AAN) Stock Sinks As Market Gains: What You Should Know
Aaron's (AAN) closed at $58.38 in the latest trading session, marking a -0.56% move from the prior day. This change lagged the S&P 500's daily gain of 0.35%. At the same time, the Dow lost 0.1%, and the tech-heavy Nasdaq gained 0.37%.
Prior to today's trading, shares of the rent-to-own company had gained 7.92% over the past month. This has outpaced the Retail-Wholesale sector's gain of 4.89% and the S&P 500's gain of 4.32% in that time.
AAN will be looking to display strength as it nears its next earnings release, which is expected to be October 29, 2020. On that day, AAN is projected to report earnings of $1.43 per share, which would represent year-over-year growth of 95.89%. Our most recent consensus estimate is calling for quarterly revenue of $1.01 billion, up 4.74% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $4.67 per share and revenue of $4.17 billion, which would represent changes of +20.05% and +5.56%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for AAN. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 2.22% higher. AAN is currently a Zacks Rank #1 (Strong Buy).
Valuation is also important, so investors should note that AAN has a Forward P/E ratio of 12.57 right now. For comparison, its industry has an average Forward P/E of 16.49, which means AAN is trading at a discount to the group.
It is also worth noting that AAN currently has a PEG ratio of 0.69. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Consumer Electronics was holding an average PEG ratio of 1.41 at yesterday's closing price.
The Retail - Consumer Electronics industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 87, which puts it in the top 35% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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