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Fundamental analysis: The Aarons Company, Inc. (AAN)

Awarener score: 5.7

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Average), the business stability (Modest) and growth (Bottom), and the company's inclination to return cash to the stockholders (Superb).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 3.0

  • Business has been shrinking at a very fast pace. It's been last-in-rank when measured against peer companies.
  • The Aarons Company, Inc. business trend isn't so stable. The higher the stability, the lower the risk. It looks slightly worse than rivals.

Margins score: 6.8

  • AAN profit margins -on goods and services sold- are usually huge. They stand top-notch against rival companies.
  • Business profit on sales tends to be good. It's substantially worse when measured against competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually excellent. They remain rather normal in relation to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be hardly sufficient in relation to total revenues. They're still mediocre against similar companies.
  • Profits -before income taxes- are usually hardly sufficient considering total sales, and remain below average when measured against rivals.
  • Total net profit tends to be hardly sufficient when confronted to sales. Company stands below average when measured against comparable firms.

Growth score: 1.3

  • The Aarons Company, Inc. profit -on goods and services sold- has been shrinking. It's been in a very weak position compared to competitors.
  • In recent years, the firm hasn't always been able to profit from operations, which has been bottom tier against comparable firms.
  • Profits -available to repay debt and purchase properties- tended to shrink, which compares substantially worse when measured against peer enterprises.
  • In the previous years, the firm couldn't always make a profit -before income taxes and interests on loans taken-. It turns to be a disappointment compared to similar stocks.
  • In past years, at least once the company lost money -before income taxes-. It was bottom tier against rivals.
  • In the previous years, the firm had at least a total net loss, and last-in-rank when measured against peer companies.
  • The company lost money at least once in the past years. It's been a disappointment compared to industry peers.

Miscellaneous score: 10.0

  • AAN managed to get a credit on income taxes in the past years, even though it earned money. It's been better than most peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 5.5

  • The Aarons Company, Inc. usually gets sufficient returns on the resources it controls. It proves weak when measured against peer firms.
  • The company normally gets hardly sufficient proceeds -on the resources directly invested in the business-. They remain in a weak position compared to similar companies.
  • Profitability -in relation to owned resources- is usually modest. It ranks weak when measured against competitors.
  • In the past, got sufficient returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's weak when measured against comparable enterprises.

Usage of Funds score: 4.4

  • AAN on average doesn't generate genuine funds, so to buy or replace property, plants and equipment must either burn existing cash or increase debt. It stands weak when measured against rival firms.
  • The company is usually not replacing property, plant, and equipment that gets old, instead using funds in something else. It can't keep forever, which is last-in-rank when measured against industry peers.
  • In the past twelve months it paid excellent dividends, considering the current stock price. It came well ranked against competitors.
  • Has greatly increased dividend payments in the past years. Business prospects are most likely good. The company has behaved excellent in relation to similar firms.
  • The company generates very few genuine funds. Dividend payments are usually on borrowed money, which isn't sustainable in the long run. Unless business prospects improve greatly, future payments could be at risk. Sustainability looks bottom tier against comparable companies.
  • The company usually significantly reduces the pool of investors, resulting in fewer mouths feeding on the pie of profits. It remains impressive in relation to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands in a weak position compared to rivals.
  • The company generates very few genuine funds. Investor rewards must be paid burning existing cash or by borrowing money, which isn't sustainable in the long run. Unless business prospects improve greatly, stockholder compensation could be at risk. It still looks last-in-rank when measured against competitors.

Balance Sheet score: 6.2

  • The Aarons Company, Inc. intangible assets (like brands and goodwill) represent a modest portion of resources controlled, according to accounting books. There could be some difficulties in liquidating them if the company ever gets in financial distress. It happens to be almost average when measured against peer companies.
  • The company has lower short-term resources than short-term obligations. Unless it's part of the business model, there might be liquidity concerns. It turns to be in a very weak position compared to similar firms.
  • Almost no resources controlled were provided for with financial debt. Financial strength is great. Company could significantly increase debt if it wished so, to reinvest in business, to buy a smaller company or to reward stockholders. It remains well ranked against rival firms.
  • Most controlled resources might be only slowly turned into cash and equivalents, which is risky. It looks below average when measured against rivals.
  • For every dollar of short-term obligations, the company has few cents of cash and short-term receivables. It's a disappointment compared to peer firms.
  • For every dollar of short-term obligations, the company has very few cents of cash and equivalents, which is mediocre against similar enterprises.
  • Usually, sales are mostly on cash. It still ranks great when measured against peers.
  • Normally has approximately somewhat less than two months of sales worth in inventory. It comes up as in a weak position compared to competitors.
  • On average, it takes approximately two months from the purchase to charging customers. It happens to be slightly better than peers.
  • On average pays suppliers approximately four months or higher after the purchase. It ranks encouraging in relation to industry peers.
  • The company charges its customers before it must pay its suppliers, so the more it sales, the more free funds it gets. It's excellent in relation to similar companies.
  • Net interest expenses consume a minor portion of usual business earnings, and are easily bearable. It stands better than most rival firms.
  • There is insufficient data to conclude on the relationship of EBITDA and debt for this company. It ranks unknown against comparable enterprises.
  • Revenues are somewhat low in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. The more property, plant, and equipment used, the more the company must reinvest to fight obsolescence, which usually means less available funds for the shareholders in the long run. It looks in a very weak position compared to similar firms.
  • Resource exploitation is very good when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still well ranked against peer companies.

Valuation score: 6.4

  • The Aarons Company, Inc. looks heavily expensive in relation to profits and financial position. It happens to be weak when measured against competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains impressive in relation to peers.
  • In the past twelve months, the company consumed lots of funds. Either it reinvested heavily in the business or genuine fund generation might be struggling, which stands bottom tier against similar companies.
  • The company usually consumes much more funds than can genuinely generate. Business needs are meet by borrowing money or consuming preexistent cash, which can only keep up until a certain limit. Unless the company is driving significant business growth, genuine profitability may be brought into question. It's still substantially worse when measured against industry firms.
  • In the past twelve months, the company has significantly rewarded investors, considering both dividends and share on the pie of earnings. It came up in good shape compared to peer ventures.
  • The company has more cash than debt. It might be poised to increase stockholder payments, or to fund new business projects. It looks somewhat better than similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation is huge, as profits were extremely low in relative terms. It ranks weak when measured against peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a very low relationship. One common cause includes profitability being very poor. It looks impressive in relation to rival firms.
  • The stock price is significantly below the accounting book value. Unless profitability is extremely low, the stock may be selling at a large discount. Pay attention to the other key indicators for hints. The company remains top-notch against peer firms.
  • In the past twelve months, the operating business earned little money when compared to the current stock price and financial position. It happens to be substantially worse when measured against industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown an extreme earnings power ability when measured against the current stock price and financial position. Further analysis is recommended, as the stock might currently be significantly undervalued. It's still excellent in relation to peer companies.

Total score: 5.4


AAN logos

Company at a glance: The Aarons Company, Inc. (AAN)

Sector, industry: Industrials, Rental & Leasing Services

Market Cap: 0.43 billions

Revenues TTM: 1.88 billions

The Aaron's Company, Inc. provides lease-to-own and purchase solutions. The company engages in direct-to-consumer sales and lease ownership of furniture, appliances, electronics, computers, and accessories through company-operated and franchised stores in the United States and Canada, as well as its e-commerce platform. It also manufactures and supplies bedding and upholstered furniture. As of December 31, 2021, the company operated 1,074 stores and 236 independently owned franchised stores. The company was formerly known as Aaron's SpinCo, Inc. The Aaron's Company, Inc. was founded in 1955 and is headquartered in Atlanta, Georgia.

Awarener score: 5.7

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Average), the business stability (Modest) and growth (Bottom), and the company's inclination to return cash to the stockholders (Superb).