Wall Street Zen Downgrades Aaron's (NYSE:PRG) to Hold

Key Points

• Wall Street Zen has downgraded Aaron's (NYSE:PRG) from a buy to a hold rating, indicating less confidence in the stock's upward potential.
• Despite the downgrade, Aaron's reported a strong earnings performance with an EPS of $1.02, surpassing estimates, and a quarterly revenue of $604.66 million.
• Aaron's also announced a recent quarterly dividend of $0.13 per share, reflecting a dividend yield of 1.59% and a payout ratio of 10.28%.

Wall Street Zen cut shares of Aaron's (NYSE:PRG - Free Report) from a buy rating to a hold rating in a research report report published on Saturday morning.

A number of other analysts have also recently commented on PRG. Loop Capital cut their price target on shares of Aaron's from $45.00 to $40.00 and set a "buy" rating for the company in a research note on Thursday, April 24th. BTIG Research cut shares of Aaron's from a "neutral" rating to a "sell" rating and set a $24.00 price target for the company. in a research note on Monday, July 14th. Finally, KeyCorp cut their price target on shares of Aaron's from $50.00 to $45.00 and set an "overweight" rating for the company in a research note on Thursday, April 24th. One equities research analyst has rated the stock with a sell rating, two have assigned a hold rating, four have issued a buy rating and one has assigned a strong buy rating to the stock. According to MarketBeat, Aaron's has a consensus rating of "Moderate Buy" and a consensus price target of $41.00.

Aaron's Stock Up 0.1%

PRG stock traded up $0.03 during mid-day trading on Friday, hitting $32.66. 544,548 shares of the company were exchanged, compared to its average volume of 413,270. The company has a debt-to-equity ratio of 0.89, a quick ratio of 2.35 and a current ratio of 5.71. The firm has a market cap of $1.32 billion, a P/E ratio of 6.45 and a beta of 1.77. The firm's 50 day simple moving average is $29.40 and its 200 day simple moving average is $30.99. Aaron's has a 1-year low of $23.50 and a 1-year high of $50.28.

Aaron's (NYSE:PRG - Get Free Report) last announced its earnings results on Wednesday, July 23rd. The company reported $1.02 EPS for the quarter, topping the consensus estimate of $0.79 by $0.23. The firm had revenue of $604.66 million for the quarter, compared to the consensus estimate of $586.25 million. Aaron's had a net margin of 8.53% and a return on equity of 22.54%. The business's quarterly revenue was up 2.1% on a year-over-year basis. During the same period last year, the company posted $0.92 EPS. On average, sell-side analysts predict that Aaron's will post 3.45 EPS for the current fiscal year.

Aaron's Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Tuesday, June 3rd. Stockholders of record on Tuesday, May 20th were issued a dividend of $0.13 per share. This represents a $0.52 dividend on an annualized basis and a dividend yield of 1.59%. The ex-dividend date of this dividend was Tuesday, May 20th. Aaron's's dividend payout ratio is currently 10.28%.

Insiders Place Their Bets

In other Aaron's news, CFO Brian Garner purchased 3,500 shares of the company's stock in a transaction dated Tuesday, May 13th. The stock was bought at an average cost of $28.93 per share, for a total transaction of $101,255.00. Following the completion of the transaction, the chief financial officer owned 132,597 shares in the company, valued at approximately $3,836,031.21. This represents a 2.71% increase in their ownership of the stock. The acquisition was disclosed in a document filed with the SEC, which is available through this link. Also, CEO Steven A. Michaels acquired 14,000 shares of the stock in a transaction on Monday, May 12th. The shares were bought at an average price of $29.03 per share, for a total transaction of $406,420.00. Following the purchase, the chief executive officer owned 559,641 shares in the company, valued at approximately $16,246,378.23. This trade represents a 2.57% increase in their ownership of the stock. The disclosure for this purchase can be found here. 3.21% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Aaron's

Several hedge funds and other institutional investors have recently made changes to their positions in PRG. Vanguard Group Inc. raised its position in Aaron's by 1.4% during the first quarter. Vanguard Group Inc. now owns 5,005,577 shares of the company's stock valued at $133,148,000 after purchasing an additional 68,369 shares in the last quarter. FMR LLC raised its position in Aaron's by 5.5% during the fourth quarter. FMR LLC now owns 2,564,441 shares of the company's stock valued at $108,373,000 after purchasing an additional 134,123 shares in the last quarter. Allianz Asset Management GmbH grew its position in Aaron's by 16.3% in the first quarter. Allianz Asset Management GmbH now owns 907,100 shares of the company's stock valued at $24,129,000 after acquiring an additional 127,384 shares during the last quarter. Breach Inlet Capital Management LLC grew its position in Aaron's by 140.7% in the first quarter. Breach Inlet Capital Management LLC now owns 703,849 shares of the company's stock valued at $18,722,000 after acquiring an additional 411,459 shares during the last quarter. Finally, Vulcan Value Partners LLC grew its position in Aaron's by 84.3% in the first quarter. Vulcan Value Partners LLC now owns 681,746 shares of the company's stock valued at $18,134,000 after acquiring an additional 311,917 shares during the last quarter. 97.92% of the stock is currently owned by institutional investors and hedge funds.

About Aaron's

PROG Holdings, Inc NYSE: PRG is a financial technology holding company based in Salt Lake City, Utah with three business segments: Progressive Leasing, which offers lease-to-own transactions primarily to credit-challenged consumers through e-commerce and point-of-sale retail partners, via online, mobile, and in-store solutions; Vive Financial, which provides consumers who may not qualify for traditional prime lending with a variety of second-look, revolving credit products through private label and branded credit cards; and Four Technologies, which provides consumers of all credit backgrounds Buy Now, Pay Later (BNPL) options through four interest-free installments via its platform, Four.