Aaron's Earnings Preview

Aaron's (NYSE: AAN  ) beat estimates by $0.04 last quarter, and investors are hoping it can beat them again. The company will unveil its latest earnings Monday. Aaron's is engaged in sales and lease ownership, specialty retailing and rental of residential and office furniture, consumer electronics, and home appliances and accessories.

What analysts say:

• Buy, sell, or hold?: Analysts strongly back Aaron's, with six of 11 rating it a buy and the remainder rating it a hold. Analysts don't like Aaron's as much as competitor Rent-A-Center overall.
• Revenue forecasts: On average, analysts predict $482.1 million in revenue this quarter. That would represent a rise of 8.3% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $0.41 per share. Estimates range from $0.38 to $0.44.

What our community says:
CAPS All-Stars are solidly behind the stock, with 88.7% assigning it an "outperform" rating. The community at large backs the All-Stars, with 87.1% granting it a rating of "outperform." Fools are keen on Aaron's, though the message boards have been quiet lately with only 83 posts in the past 30 days. Despite the majority sentiment in favor of Aaron's, the stock has a middling CAPS rating of three out of five stars.

Management:
The company's profit has risen year over year by an average of 9.3%. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter	Q1	Q4	Q3	Q2
Gross Margin	81.3%	78.7%	82.2%	83.4%
Operating Margin	13.5%	10.3%	9.3%	8.8%
Net Margin	8.3%	6.4%	5.8%	5.5%

One final thing: If you want to keep tabs on Aaron's movements, and for more analysis on the company, make sure you add it to your watchlist.

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