Value
9.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.9 |
| P/S | 10.0 |
| EV/EBITDA | 8.4 |
| Fwd P/E | 10.0 |
| PEG | 10.0 |
| Analyst target | 7.5 |
- ▸Forward P/E: 4.5x
- ▸PEG: 0.10
- ▸Attractively valued
UPBD · Why this verdict
Why Upbound Group (UPBD) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score6.1/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Upbound Group trades at an extremely cheap forward P/E of 3.9x with a PEG of just 0.09 and 35% analyst upside, converting 1,000% of net income to free cash flow, but a confirmed death cross, 3 consecutive earnings misses by an average of 72%, and high implied volatility of 110% create substantial near-term execution uncertainty.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Upbound Group trades at a forward P/E of 3.9x with a PEG of 0.09 and ranks in the top decile of peers on value metrics — meaning the market is pricing in either dramatically reduced earnings or a structural impairment that the analyst consensus of 35% upside does not reflect. Valuation breakdown | The forward P/E multiple expands from 3.9x toward 6x or higher within 12 months as earnings stabilize and the discount narrows | ↑Improving |
| CounterThree consecutive large earnings misses — averaging a 72% shortfall — suggest the earnings base that generates the low PEG is itself uncertain; the discount may be accurate rather than an opportunity | ||
Upbound converts 1,000% of net income to free cash flow — one of the highest conversions in the entire dataset — indicating that non-cash charges (depreciation on rental assets, amortization) significantly reduce reported net income while actual cash generation remains strong relative to the depressed earnings figure. Quality breakdown | Free cash flow per share stays above $2.50 over the next 4 reported quarters, confirming sustained cash generation independent of the reported earnings volatility | →Stable |
| CounterHigh FCF-to-net-income ratios in lease-to-own businesses reflect structural depreciation on rental merchandise; if the rental merchandise base declines due to lower demand, FCF could contract rapidly | ||
Upbound missed earnings estimates by 75%, 77%, and 64% in three consecutive quarters, with average shortfall of 72% — a pattern of severe and repeated execution failure that raises fundamental questions about the reliability of both management forecasts and analyst models. Earnings | The next earnings report produces an EPS surprise above -10%, and the miss magnitude falls to less than 15% below estimates, signaling that the earnings base has stabilized | →Stable |
| CounterThe most recent quarter (April 2026) was essentially in-line at +0.15%, suggesting the miss cycle may have bottomed and consensus estimates have been reset to a achievable level | ||
A confirmed death cross with the 200-day moving average declining at 3.0% per 30 days represents a hard momentum block at current prices, indicating that the intermediate-term price trend remains negative despite a recovering MACD signal. Engine gate (failed) | The death cross resolves and price crosses back above the 200-day moving average within 9 months, removing the hard technical block | →Stable |
| CounterRSI is improving at 55 and MACD is bullish, indicating the recovery from the momentum trough may be underway even while the 200-day average still reflects the historical weakness | ||
Upbound Group trades at a forward P/E of 3.9x with a PEG of 0.09 and ranks in the top decile of peers on value metrics — meaning the market is pricing in either dramatically reduced earnings or a structural impairment that the analyst consensus of 35% upside does not reflect.
↑ImprovingValuation breakdown
- Expectation
- The forward P/E multiple expands from 3.9x toward 6x or higher within 12 months as earnings stabilize and the discount narrows
CounterThree consecutive large earnings misses — averaging a 72% shortfall — suggest the earnings base that generates the low PEG is itself uncertain; the discount may be accurate rather than an opportunity
Upbound converts 1,000% of net income to free cash flow — one of the highest conversions in the entire dataset — indicating that non-cash charges (depreciation on rental assets, amortization) significantly reduce reported net income while actual cash generation remains strong relative to the depressed earnings figure.
→StableQuality breakdown
- Expectation
- Free cash flow per share stays above $2.50 over the next 4 reported quarters, confirming sustained cash generation independent of the reported earnings volatility
CounterHigh FCF-to-net-income ratios in lease-to-own businesses reflect structural depreciation on rental merchandise; if the rental merchandise base declines due to lower demand, FCF could contract rapidly
Upbound missed earnings estimates by 75%, 77%, and 64% in three consecutive quarters, with average shortfall of 72% — a pattern of severe and repeated execution failure that raises fundamental questions about the reliability of both management forecasts and analyst models.
→StableEarnings
- Expectation
- The next earnings report produces an EPS surprise above -10%, and the miss magnitude falls to less than 15% below estimates, signaling that the earnings base has stabilized
CounterThe most recent quarter (April 2026) was essentially in-line at +0.15%, suggesting the miss cycle may have bottomed and consensus estimates have been reset to a achievable level
A confirmed death cross with the 200-day moving average declining at 3.0% per 30 days represents a hard momentum block at current prices, indicating that the intermediate-term price trend remains negative despite a recovering MACD signal.
→StableEngine gate (failed)
- Expectation
- The death cross resolves and price crosses back above the 200-day moving average within 9 months, removing the hard technical block
CounterRSI is improving at 55 and MACD is bullish, indicating the recovery from the momentum trough may be underway even while the 200-day average still reflects the historical weakness
Per-dimension breakdown
Quality
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.0 |
| ROA | 4.9 |
| Gross margin | 5.7 |
| Op margin | 3.0 |
| Net margin | 0.9 |
| Current ratio | 9.9 |
| FCF quality | 10.0 |
| Moat | 5.0 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 1000% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
6.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.4 |
| EPS growth | 10.0 |
Momentum
2.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 2.8 |
| OBV | 1.0 |
| MA position | 5.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.7 |
| Price target | 9.0 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (7.0) — signal dampened
- ▸Analyst upside: 37%
Insider
7.5/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.5 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Insider buying (low materiality) — $91,312 (0.007% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.8 |
| quality rank | 4.5 |
| growth rank | 1.2 |
Technical
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.2 |
| support resistance | 5.5 |
| 52w position | 6.2 |
| gap | 6.0 |
Risk (lower is worse)
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.7 |
| days to cover | 4.6 |
| volatility | 1.8 |
| put call | 0.0 |
| implied vol | 2.5 |
| max pain risk | 3.0 |
| beta | 4.0 |
| debt equity | 2.6 |
- ▸Elevated put/call: 8.29
- ▸High IV: 65%
- ▸Above max pain $2
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.0 |
| dividend safety | 5.8 |
- ▸Strong earnings: 3B/0M
- ▸Earnings in 7 days
- ▸Dividend: 7.1%
How the verdict was assembled
Engine trigger
Extreme risk factors.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:RISK_FLOORPassed (5)
- ASYMMETRY:2.2>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.9<4.5
- EARNINGS_PROXIMITY:7d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
2.21
Upside
+18.9%
Downside
8.6%
Sizing output
AVOID
SetupRange Bound — RSI 58 mid-range, Bollinger mid-band
EdgeInst Constrain — Small cap ($1.2B) below institutional reach
SuitabilityAggressive — Beta 1.79>1.3, MCap $1.2B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the MOMENTUM gate's 2.9<4.5 outcome against Value at 9.0 and asymmetric R:R of 2.21.
The strongest dimensions are Value at 9.0, Insider at 7.5, and Sentiment at 7.4; the weakest are Risk (lower is worse) at 2.8, Momentum at 2.9, and Peer rank at 3.7. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 2.21 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Extreme Valuation Discount Peg Near Zero
Trip ifForward P/E falls below 2.5x without a corresponding cut in analyst price targets, signaling further re-rating
- P2Exceptional Free Cash Flow Conversion
Trip ifFree cash flow conversion falls below 200% of net income for more than 2 consecutive quarters
- P3Three Consecutive Large Earnings Misses
Trip ifEPS surprise falls below -30% in at least 2 of the next 4 quarters, resuming the severe miss pattern
- P4Death Cross Confirmed Downtrend
Trip ifPrice drops below $17.05 stop-loss level, more than 7% below the current $18.33