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Upbound Group (UPBD): Evaluating Valuation Following Earnings Growth and CFO Appointment

Simply Wall St·11/05/2025 14:36:02
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Upbound Group (UPBD) just released its third-quarter results, revealing higher sales and revenue compared to last year, although profits decreased. Along with the earnings announcement, the company named Hal Khouri as its new Chief Financial Officer.

See our latest analysis for Upbound Group.

Despite higher sales and a new CFO appointment, Upbound Group’s recent momentum has been choppy, with a 1-year total shareholder return of -32.07% and a year-to-date share price return of -30.87%. While three-year investors have seen modest gains, recent declines suggest sentiment is still adjusting as the company navigates these changes and charts its next phase.

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With shares trading at a sizable discount to analyst targets and mixed earnings trends, the question for investors is whether Upbound Group’s current valuation signals a real buying opportunity or if the market already anticipates the company’s next moves.

Most Popular Narrative: 38.9% Undervalued

With Upbound Group's most-followed narrative assigning a fair value of $32.38 per share compared to a last close price of $19.77, the implied undervaluation is striking. This gap sets the tone for a deeper look into what is fueling such a bullish stance.

Persistent focus on merchant growth, especially with the 10% increase in merchant partners and the addition of notable partners such as Purple mattress and iFIT, is likely to fuel GMV growth impacting revenue positively. The integration of the Acceptance Now business into Acima's decision engine is aimed at improving underwriting capabilities, potentially leading to lower lease charge-off rates, impacting net margins positively.

Read the complete narrative.

Curious what underpins this optimistic fair value? The narrative hinges on bold assumptions—a projected margin leap, a steady rise in sales, and a future profit multiple that bucks the sector norm. Want the details and the real drivers behind these numbers? These core forecasts may surprise even seasoned retail investors.

Result: Fair Value of $32.38 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent legal battles and economic headwinds could disrupt Upbound Group’s turnaround story and challenge the upbeat narrative now driving valuation estimates.

Find out about the key risks to this Upbound Group narrative.

Build Your Own Upbound Group Narrative

If you have a different take or want to dig into the numbers on your own terms, you can develop your own view in just a few minutes. Do it your way.

A great starting point for your Upbound Group research is our analysis highlighting 4 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.