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Upbound Group, Inc. (UPBD)
NASDAQ:UPBD
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Upbound Group
(NASDAQ:UPBD)
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Rating:61Neutral
Price Target:
$24.00
▲(5.36% Upside)
Action:ReiteratedDate:02/23/26
Overall score reflects a balanced setup: improving cash generation and constructive 2026 guidance support the outlook, but thin profitability and elevated leverage are meaningful constraints. Technicals are positive but appear somewhat overextended, while valuation/dividend yield are supportive.
Positive Factors
Improved cash generation
Material improvement in operating and free cash flow provides durable financial flexibility: it supports reinvestment in technology and data, funds deleveraging targets and dividends, and reduces reliance on external financing. Sustained cash conversion strengthens the company’s ability to execute multi-year growth plans.
Record and accelerating revenue
Consistent top-line acceleration and a record revenue year indicate durable market demand and scalable commercial execution across segments. Higher revenue provides a larger base to absorb fixed costs, supports margin recovery over time, and underpins strategic investments and long-term EBITDA growth.
High-growth Bridget segment
Bridget’s rapid subscriber and revenue growth creates a structurally higher-growth, recurring-revenue engine with improving unit economics. Its scale and ARPU expansion can materially diversify revenue mix, lift consolidated margins over time, and serve as a strategic lever for cross-selling and higher-margin digital offerings.
Negative Factors
Elevated leverage
High debt levels limit financial flexibility and increase sensitivity to interest rates and refinancing cycles. Elevated leverage constrains capital allocation choices, forces prioritization of deleveraging over growth or buybacks, and raises downside risk if cash generation weakens during economic stress.
Thin profitability and margin compression
Low net and compressed operating margins indicate limited earnings conversion of revenue and a narrow buffer against cost inflation. Sustained margin pressure reduces free cash flow potential, weakens returns on invested capital, and requires persistent efficiency gains to achieve durable profitability improvements.
Elevated loss rates in Acima
Higher credit loss rates signal underwriting and vintage risk that can structurally depress returns in the financing-based Acima business. Remedial underwriting reduces GMV and growth, while persistent losses would erode segment EBITDA and require capital or pricing adjustments to restore sustainable economics.
Upbound Group (UPBD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.21B
Dividend Yield8.88%
Average Volume (3M)672.36K
Price to Earnings (P/E)14.2
Beta (1Y)1.25
Revenue Growth7.48%
EPS Growth2.05%
CountryUS
Employees11,970
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)1.01
Shares Outstanding57,905,730
10 Day Avg. Volume764,561
30 Day Avg. Volume672,356
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)2.53
Price to Sales (P/S)0.37
P/FCF Ratio32.91
Enterprise Value/Market Cap2.33
Enterprise Value/Revenue0.60
Enterprise Value/Gross Profit1.34
Enterprise Value/Ebitda2.80
Forecast
1Y Price Target
$33.00Price Target Upside44.86% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)4.68
Revenue Forecast (FY)$5.02B
Upbound Group Business Overview & Revenue Model
Company DescriptionUpbound Group, Inc., an omni-channel platform company, leases household durable goods to customers on a lease-to-own basis in the United States, Puerto Rico, and Mexico. The company operates in four segments: Rent-A-Center Business, Acima, Mexico, and Franchising. The company's brands, such as Rent-A-Center and Acima that facilitate consumer transactions across a range of store-based and virtual channels. It offers furniture comprising mattresses, tires, consumer electronics, appliances, tools, handbags, computers, smartphones, and accessories. The company also provides merchandise on an installment sales basis; and the lease-to-own transaction to consumers who do not qualify for financing from the traditional retailer through kiosks located within retailer's locations. It operates retail installment sales stores under the Get It Now and Home Choice names; lease-to-own and franchised lease-to-own stores under the Rent-A-Centre, ColorTyme, and RimTyme names; and company-owned stores and e-commerce platform through rentacenter.com. The company was formerly known as Rent-A-Center, Inc. and changed its name to Upbound Group, Inc. in February 2023. Upbound Group, Inc. was founded in 1960 and is headquartered in Plano, Texas.
How the Company Makes MoneyUpbound Group primarily generates revenue through a subscription-based model for its software platforms, allowing clients to access various features and services for a recurring fee. Additionally, the company earns income from consulting services, where it provides expertise in supply chain optimization and technology integration. Key revenue streams include licensing fees for software usage, customization services for enterprise clients, and maintenance contracts. Significant partnerships with major logistics firms and technology providers also contribute to its earnings, as these collaborations expand the reach of Upbound's offerings and enhance its market presence.
Upbound Group Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call presents a predominantly positive picture: record full-year revenue, growth in adjusted EBITDA and EPS, materially stronger cash flow, and clear 2026 guidance that implies stability or growth across segments. High-growth assets (Bridget) and momentum at Acima and Rent‑A‑Center provide catalysts. Notable headwinds include margin compression, elevated loss rates (particularly at Acima), Rent‑A‑Center EBITDA decline, Bridget product rollout delays, legal accruals, and elevated leverage. Management has articulated focused priorities — disciplined underwriting, investments in data/technology, targeted cost actions, and a plan to reduce leverage — which support a constructive outlook despite near-term challenges.Q4-2025 Updates
Positive Updates
Record Full-Year Revenue
Full-year 2025 revenue grew 8.7% to approximately $4.7 billion — the highest full-year revenue on record for Upbound, surpassing the prior record in FY2021.
Improved Profitability and Cash Generation
Adjusted EBITDA for 2025 was nearly $510 million, up 7.5% year over year. Non-GAAP diluted EPS was $4.13, up 7.8% from $3.83 in 2024. Free cash flow was ~$180 million, increasing by over $130 million year over year; net cash provided by operations was ~$306 million, up over $200 million year over year.
Bridget: Rapid User and Revenue Growth
Bridget finished Q4 with ~1.6 million paid subscribers (nearly +30% YoY), monthly ARPU of $14.15 (≈+10% YoY), Q4 revenue of $64.6 million (+41.5% YoY), and Q4 adjusted EBITDA of $11.1 million with a 17.2% margin. 2026 guidance expects Bridget revenue of $265M–$285M (>30% annual growth) and adjusted EBITDA $50M–$60M.
Acima GMV and Revenue Momentum
Acima Q4 GMV was nearly $550 million (highest since acquisition) with GMV up modestly (~+40 bps YoY). Acima revenue grew 8.6% YoY (its ninth consecutive quarter of revenue growth); Q4 adjusted EBITDA was $87 million (+7.3% YoY). Direct-to-consumer marketplace GMV grew >100% YoY in 2025 and now accounts for ~10% of Acima GMV.
Rent‑A‑Center Stabilization and Improved Same‑Store Sales
Rent‑A‑Center trends improved into H2 2025: Q4 same-store sales grew 80 basis points YoY (improving 40 bps sequentially), Q4 revenue was nearly $480 million (flat YoY), loss rate improved to 4.9% (down 10 bps YoY), and portfolio value ended the year up ~11% YoY, indicating stabilization after underwriting adjustments.
Clear 2026 Outlook and Capital Allocation Priorities
Company provided 2026 consolidated guidance: revenue $4.7B–$4.95B, adjusted EBITDA $500M–$535M, non‑GAAP EPS $4.10–$4.35, and free cash flow ~ $200M. Management prioritized reinvestment, deleveraging (target long-term leverage ~2x), sustaining dividends, and opportunistic buybacks.
Negative Updates
Margin Compression at Consolidated and Segment Levels
Q4 consolidated adjusted EBITDA margin was 10.5%, down 90 basis points YoY. Rent‑A‑Center adjusted EBITDA fell ~13% YoY with margins down 230 basis points, and Acima EBITDA margins were modestly lower YoY (down 10 bps) despite sequential improvement.
Elevated Loss Rates at Acima
Acima's Q4 loss rate was 10.1%, up 110 basis points YoY and up 40 bps sequentially. Management cited challenging vintages underwritten earlier in 2025 that temporarily increased losses and that they tightened underwriting which will weigh on near-term GMV.
Bridget Loss Rate Increase and Delayed Product Rollouts
Bridget's instant cash loss rate rose to 3.5% in Q4 (up 70 bps YoY). Management delayed broader product launches (e.g., line of credit rollout) due to slower-than-expected bank partner approvals and macro prudence, pushing some growth from 2026 into 2027.
Rent‑A‑Center EBITDA and Margin Pressure
Although same-store sales improved, Rent‑A‑Center adjusted EBITDA declined ~13% YoY in Q4 and margins compressed 230 bps YoY, partly due to a lack of certain prior-year operating expense benefits and category mix and cost pressures (e.g., tariffs impacting furniture).
Legal and Regulatory Cash Exposure
Estimated legal accrual was $72 million at year-end 2025 tied to previously disclosed matters. Guidance assumes a $72 million non-ordinary course cash outflow for settlements (including the multistate matter), representing a known near-term cash liability.
Elevated Leverage and Liquidity Considerations
Net leverage at year-end was ~2.9x (up from 2.7x prior year) due to the Bridget acquisition. Year-end liquidity (cash + revolver) was ~$358 million. Management prioritized deleveraging over share repurchases in the near term.
Company Guidance
Upbound's 2026 guidance calls for consolidated revenue of $4.7–$4.95 billion, adjusted EBITDA of $500–$535 million and non‑GAAP diluted EPS of $4.10–$4.35, with free cash flow rising to about $200 million (including an estimated ~$100 million benefit from accelerated tax depreciation); the company expects an effective tax rate near 26%, average diluted shares of ~59.4 million, corporate costs ≈4% of revenue, and includes a $72 million non‑ordinary legal/regulatory cash outflow while keeping CapEx relatively flat to 2025. First‑quarter 2026 guidance is revenue $1.16–$1.26 billion, adjusted EBITDA $120–$130 million and non‑GAAP EPS $1.05–$1.15. By segment, Acima is expected to deliver mid‑single‑digit GMV and revenue growth with adjusted EBITDA margins roughly in line with 2025 and losses stabilizing around 9.5% (Q1 lease charge‑offs mid‑9%); Bridget is projected to grow >30% to $265–$285 million of revenue with adjusted EBITDA of $50–$60 million (Q1 net advance loss ratio ~3–3.5%); and Rent‑A‑Center revenue is expected to be flat to positive with adjusted EBITDA margins in line with 2025 and lease charge‑offs flat to slightly higher sequentially. The company is targeting long‑term net leverage near 2.0x (year‑end 2025 net leverage ~2.9x) with progress through 2026.Upbound Group Financial Statement Overview
Summary
Mixed fundamentals: strong TTM revenue acceleration and improved free cash flow/operating cash flow, but profitability remains thin (low net margin and compressed operating margin) and leverage is elevated (high debt-to-equity), limiting flexibility.Income Statement
TTM (Trailing-Twelve-Months) revenue accelerated sharply versus recent years, and gross margin remains solid (~45%). However, profitability is thin: net margin is low (~1.6%) and down from 2024, while operating margin also compressed, indicating higher costs and weaker earnings conversion despite top-line growth. Results show improvement from the near-breakeven/negative earnings period in 2022–2023, but current earnings quality remains modest.56
Neutral
Balance Sheet
Leverage is elevated with debt running well above equity (debt-to-equity ~2.4x in TTM), which reduces financial flexibility and raises refinancing/interest-rate sensitivity. Equity has improved versus earlier periods, and return on equity in TTM is positive (~10.7%), but it is meaningfully below 2024 levels and the capital structure remains the key constraint.43
Neutral
Cash Flow
Cash generation improved materially: TTM free cash flow and operating cash flow are both positive and sharply higher than 2024, with free cash flow nearly matching net income (strong cash conversion). The main drawback is that operating cash flow still does not fully cover EBIT in TTM (coverage below 1), suggesting cash generation is good but not yet consistently strong relative to operating profit.62
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.70B | 4.32B | 3.99B | 4.25B | 4.58B | 2.81B |
| Gross Profit | 2.11B | 2.08B | 2.02B | 2.08B | 2.24B | 1.67B |
| EBITDA | 1.01B | 339.01M | 290.54M | 283.05M | 435.01M | 294.77M |
| Net Income | 73.24M | 123.48M | -5.18M | 12.36M | 134.94M | 208.12M |
Balance Sheet | ||||||
| Total Assets | 3.28B | 2.65B | 2.72B | 2.76B | 2.99B | 1.75B |
| Cash, Cash Equivalents and Short-Term Investments | 120.53M | 60.86M | 93.70M | 144.14M | 108.33M | 159.45M |
| Total Debt | 1.70B | 1.58B | 1.60B | 1.67B | 1.87B | 475.84M |
| Total Liabilities | 2.58B | 2.02B | 2.16B | 2.24B | 2.48B | 1.16B |
| Stockholders Equity | 695.74M | 628.98M | 560.37M | 525.15M | 513.28M | 592.08M |
Cash Flow | ||||||
| Free Cash Flow | 305.57M | 48.45M | 146.89M | 407.07M | 329.85M | 201.96M |
| Operating Cash Flow | 305.57M | 104.72M | 200.29M | 468.46M | 392.30M | 236.50M |
| Investing Cash Flow | -403.73M | -41.51M | -50.96M | -62.33M | -1.34B | -20.61M |
| Financing Cash Flow | 156.47M | -93.52M | -202.12M | -370.71M | 892.85M | -126.68M |
Upbound Group Technical Analysis
Positive
22.78
Price Trends
19.07
Positive
19.30
Positive
21.45
Positive
Market Momentum
0.71
Negative
72.87
Negative
71.99
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UPBD, the sentiment is Positive. The current price of 22.78 is above the 20-day moving average (MA) of 20.09, above the 50-day MA of 19.07, and above the 200-day MA of 21.45, indicating a bullish trend. The MACD of 0.71 indicates Negative momentum. The RSI at 72.87 is Negative, neither overbought nor oversold. The STOCH value of 71.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for UPBD.
Upbound Group Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $1.44B | 25.35 | 32.71% | 2.66% | 18.30% | 22.19% | |
69 Neutral | $1.79B | -385.02 | -1.68% | ― | 19.87% | -136.93% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $1.21B | 14.25 | 11.06% | 8.88% | 7.48% | 2.05% | |
59 Neutral | $959.87M | -10.66 | -32.68% | ― | 12.78% | -20.47% | |
56 Neutral | $930.43M | -188.02 | ― | ― | -2.13% | ― |
* Technology Sector Average
UPBD
Upbound Group
22.78
-1.88
-7.64%
PRCH
Porch Group
8.05
4.12
104.83%
SEMR
SEMrush Holdings
11.82
-4.02
-25.38%
KARO
Karooooo
45.49
0.37
0.82%
AMPL
Amplitude
7.08
-5.72
-44.69%
Upbound Group Corporate Events
Business Operations and StrategyFinancial Disclosures
Upbound Group Posts Strong 2025 Results, Sets 2026 Outlook
Positive
Feb 19, 2026
On February 19, 2026, Upbound Group reported its fourth-quarter and full-year 2025 results, highlighting 11% year-over-year consolidated revenue growth to $1.2 billion and strong performance across its key brands. Acima delivered its ninth consecutive quarter of gross merchandise volume and revenue growth with a 9% revenue increase, while Brigit generated $65 million of revenue supported by about 1.6 million paying subscribers and nearly 10% growth in average revenue per user.
The Rent-A-Center business showed signs of stabilization, with same-store sales up 0.8% and a modest improvement in lease charge-off rates, and the company’s operating cash flow rose to $42 million, more than $100 million higher than a year earlier, underscoring improving cash generation. Upbound also introduced its 2026 outlook, projecting consolidated revenue between $4.7 billion and $4.95 billion and adjusted EBITDA of $500 million to $535 million, signaling continued growth ambitions and providing investors with clearer visibility into its expected financial trajectory.
The most recent analyst rating on (UPBD) stock is a Buy with a $22.00 price target. To see the full list of analyst forecasts on Upbound Group stock, see the UPBD Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.