Aaron's Earnings Preview

Aaron's (NYSE: AAN  ) didn't hit the Street's expectations last quarter, but investors hope that it will rebound this quarter. The company will unveil its latest earnings on Friday. Aaron's is engaged in the sales and lease ownership, specialty retailing, and rental of residential and office furniture, consumer electronics, and home appliances.

What analysts say:

• Buy, sell, or hold?: Analysts strongly back Aaron's, with eight of 12 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. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to moderate buy.
• Revenue forecasts: On average, analysts predict $519.3 million in revenue this quarter. That would represent a rise of 7.2% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $0.43 per share. Estimates range from $0.41 to $0.44.

What our community says:
CAPS All-Stars are enthusiastically backing the stock, with 87.5% granting it an outperform rating. Most of the community concurs with the All-Stars, with 87.3% assigning it a rating of outperform. Fools feel positively about Aaron's, though the message boards have been quiet lately with only 84 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:
Aaron's income has fallen year-over-year by an average of 1.4% over the past five quarters. Revenue has now gone up for three straight quarters.

Now, a look at how efficient management has been at running the business. Traditionally, margins serve as an illustration of how efficiently a company captures portions of sales dollars. The company's net margins, which reflect what percentage of revenue becomes profit, have slipped downward year-over-year in the last two quarters. See how Aaron's has been doing for the last four quarters:

Quarter	Q3	Q2	Q1	Q4
Gross Margin	82.8%	83%	81.3%	78.7%
Operating Margin	9.3%	3.7%	13.5%	10.3%
Net Margin	5.8%	2.2%	8.3%	6.4%

For all our Aaron's-specific analysis, including earnings and beyond, add Aaron's to My Watchlist.

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Earnings estimates provided by Zacks.