The Plano, TX-based rent-to-own operator, which provides consumer electronics and furniture, reported disappointing 2015 third quarter results, KeyBanc said.
Rent-A-Center reported third quarter earnings of 47 cents per share on revenue of $791.6 million on Monday. Analysts surveyed by Thomson Reuters had projected that the company would earn 45 cents per share on revenue of $803.25 million.
Rent-A-Center has lowered its 2015 earnings guidance to between $2 and $2.10 per share versus its previous guidance of $2.05 to $2.20 per share.
"We have been disappointed by RCII's quarterly execution, the profitability of smartphones, and margin pressure in Acceptance Now," KeyBanc said. "We believe there is still a risk that further deterioration in the core business could cause results to fall short of our expectations in the coming quarters."
Shares of Rent-A-Center were down by 0.89% to $17.73 in mid-morning trading on Thursday.
Separately, TheStreet Ratings team rates RENT-A-CENTER INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate RENT-A-CENTER INC (RCII) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.
You can view the full analysis from the report here: RCII