Value
9.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.2 |
| P/S | 10.0 |
| EV/EBITDA | 8.5 |
| Fwd P/E | 10.0 |
| PEG | 10.0 |
| Analyst target | 7.5 |
- ▸Forward P/E: 4.2x
- ▸PEG: 0.09
- ▸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
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 | →Stable |
| 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.
→StableValuation 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
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.
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
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 2.5 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 9.3 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 43%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider buying — $45,206 (0.004% of mkt cap)
Peer rank
3.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.9 |
| quality rank | 4.5 |
| growth rank | 1.2 |
Technical
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.0 |
| support resistance | 3.7 |
| 52w position | 5.4 |
Risk (lower is worse)
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.6 |
| days to cover | 2.2 |
| volatility | 0.5 |
| put call | 10.0 |
| implied vol | 4.2 |
| beta | 4.0 |
| debt equity | 2.6 |
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.0 |
| dividend safety | 5.2 |
- ▸Strong earnings: 3B/0M
- ▸Dividend: 784.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (8)
- MOMENTUM:7.1>=5.5
- ASYMMETRY:2.0>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:27d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (1)
- DEATH_CROSS:momentum=7.1>=5.0 recovering
Reward-to-Risk
2.00
Upside
+24.7%
Downside
12.3%
Sizing output
AVOID
SetupMomentum Cont — Trend continuation, RSI 61, MACD bullish
EdgeCatalyst-Driven — Earnings in 27d with 3/4 beat streak
SuitabilityAggressive — Beta 1.79>1.3, MCap $1.2B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.6 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 9.1) was not enough to lift the adjusted overall above the threshold. Current asymmetry R:R is 2.00 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 9.1, Momentum at 7.1, and Growth at 6.7; the weakest are Peer rank at 3.6, Risk (lower is worse) at 3.9, and Technical at 4.0. The V9 engine cleared all gates with 1 warning, producing an asymmetric reward-to-risk of 2.00 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