Upbound Group’s Strong Performance and Long-term Confidence Despite Near-term Challenges

Analyst Hoang Nguyen from TD Cowen maintained a Buy rating on Upbound Group (UPBD – Research Report) and keeping the price target at $45.00.

Hoang Nguyen’s rating is based on Upbound Group’s performance exceeding expectations in key areas such as rentals, fees, and franchise merchandise sales, despite some challenges with lower store merchandise sales. The company’s revenue surpassed consensus estimates by 2 percentage points, although higher costs in rentals and fees impacted the gross margin. Operating expenses were lower than anticipated, and the growth in leased assets was slightly below expectations, yet Acima’s gross merchandise volume outperformed estimates.
Nguyen also considered Upbound Group’s initial 2025 guidance, which was slightly below consensus for EPS, revenue, and EBITDA, as well as the impact of legal accruals related to regulatory lawsuits, which were lower than previously expected. Despite these challenges, Acima showed strong momentum with notable merchant wins and a diversified partner base. Nguyen’s investment conclusion reflects an adjusted price target of $45, based on an 8x multiple of the 2026 EPS estimate, indicating confidence in the company’s longer-term prospects.