Abstract

Upbound Group will report fourth-quarter results on February 19, 2026 Pre-Market; this preview consolidates recent financial trends, the latest quarterly estimates, and current commentary to frame expectations for revenue, margins, net profit, and EPS.

Market Forecast

Consensus-derived estimates point to fourth-quarter revenue of 1.17 billion, an EBIT of 98.47 million, and EPS of $1.00, with year-over-year changes of 10.79% for revenue, 2.24% for EBIT, and -3.14% for EPS. Forecast margins were not disclosed alongside these estimates; the last reported gross margin was 48.34%, while net profit margin stood at 1.14%.

The principal revenue stream appears to remain anchored in rental operations, which constituted the bulk of the mix in the latest quarter; outlook emphasis centers on sustaining collection efficiency and expense discipline to protect margin quality. Within the portfolio, Subscription and Fees (57.66 million last quarter) presents a recurring-revenue add-on to the core model; segment-specific year-over-year growth was not disclosed.

Last Quarter Review

Upbound Group reported revenue of 1.16 billion in the previous quarter, with a gross profit margin of 48.34%, GAAP net profit attributable to the parent company of 13.22 million, a net profit margin of 1.14%, and adjusted EPS of $1.00; revenue rose 8.97% year over year, while adjusted EPS increased 5.26% year over year.

A notable highlight was EBIT of 106.12 million, which expanded 8.06% year over year and exceeded earlier estimates by 30.93 million. Main business composition continued to lean toward rental fees at 901.34 million, with Merchandise contributing 198.10 million, Subscription and Fees at 57.66 million, and Other at 7.62 million; segment-level year-over-year changes were not disclosed with the mix.

Current Quarter Outlook

Rental Operations and Revenue Mix

The quarter’s revenue projection of 1.17 billion signals a continuation of the multi-quarter expansion, with a 10.79% year-over-year increase paced by the core rental model. The mix observed in the prior period—rental fees at 901.34 million (77.39% of revenue), merchandise sales at 198.10 million, and subscriptions/fees at 57.66 million—implies that rental performance and related collection dynamics will be central to whether top-line outperforms the estimate. Because rental revenue is reported net of returns and credits, small changes in collections quality and write-off behavior can carry outsized implications for net revenue and profit conversion in the quarter.

Gross margin was last reported at 48.34%, a level that is sensitive to merchandise procurement costs, operating efficiencies at the store and regional levels, and the cadence of promotional activity. Sustaining this margin while expanding revenue would typically rely on steady ticket values, measured promotional depth, and cost management around labor and logistics. The net profit margin of 1.14% in the last quarter underscores a modest conversion rate from revenue to GAAP net profit; the estimate framework suggests EBIT growth of 2.24% year over year, which, if realized alongside revenue growth, would reflect incremental operating leverage provided fixed and semi-fixed expenses remain contained.

Sequential trends also deserve attention. The most recent quarter reported a negative quarter-on-quarter change in net profit, reflecting the normal seasonality and discrete items that can influence bottom-line delivery. For the to-be-reported quarter, the forecasted EPS of $1.00 with a -3.14% year-over-year change positions the company to deliver relatively stable earnings per share even as revenue rises. This combination typically arises when gross margin is stable but operating expenses and interest/cost items tighten the net conversion. The structural mix—dominated by rental revenue—should continue to anchor the quarter’s narrative.

Subscription and Fees as Adjacent Growth

Subscription and Fees, at 57.66 million in the last quarter, represents a recurring-revenue adjunct that can elevate average revenue per customer and stabilize cash flows. While the segment’s year-over-year change was not disclosed, the recurring nature of associated fees suggests resilience in bridging the quarter’s weaker points and, when appropriately managed, may contribute incremental margin accretion given its relatively lower cost to service. The magnitude remains modest relative to rental operations, but its role in rounding out the customer economics is meaningful.

From an internal performance mechanics perspective, subscription-based revenues often scale with customer engagement and retention. Success in this segment requires disciplined fee structures and rigorous compliance around disclosures and customer experience to maintain renewal rates and mitigate friction. Given the EPS estimate’s slight year-over-year decline, any incremental strength in subscriptions/fees could partially offset pressures from operating costs or other below-the-line items. A stable or improving contribution from subscriptions and fees would be consistent with a view that revenue growth outpaces profit growth in this quarter, yet still supports medium-term profitability through enhanced lifetime value.

Operationally, subscription offerings can create a cushion against volatility in merchandise margins or changes in promotional mapping. In the current setup, where revenue growth is outpacing EPS growth, the company’s ability to extract more value from existing customer relationships—without materially increasing servicing costs—would be a supportive element. Even without a disclosed year-over-year comparison for the segment, attention to the proportion of fees in the overall mix and the durability of recurring billing cycles will be focal points for interpreting the quarter’s print.

Stock Price Drivers This Quarter

The most direct driver for the equity reaction is likely the interplay between the reported revenue growth and the observed earnings conversion. With revenue estimated to rise 10.79% year over year to 1.17 billion and EBIT estimated to grow 2.24% year over year to 98.47 million, investors will be looking for evidence of operating leverage beyond what is encapsulated in EBIT, particularly in the relationship between gross margin and operating expense trajectories. A visible bridge from revenue growth to EPS stability—despite the anticipated EPS decline of 3.14% year over year—would reduce uncertainty and provide clarity on the path toward improved net conversion through the remainder of the year.

Gross margin stewardship and expense containment are second-order determinants that can quickly become first-order if the headline growth aligns with estimates. If gross margin remains near the last reported 48.34% while revenue delivers in line, the stock’s reaction will hinge on how management frames the expense run-rate and collection quality. Any signals of tightening charge-off rates, improved delinquency management, or efficiencies in procurement could support a constructive interpretation, even if EPS prints slightly below the year-ago figure.

The balance between rental mix and merchandise profit is also a near-term variable. Merchandise sales of 198.10 million in the last quarter function as both a demand indicator and a margin determinant; if merchandise contribution expands without diluting margin (through heavier promotions), it would complement the rental base and add breadth to the top line. Conversely, if merchandise growth requires deeper discounting, the margin implications could weigh on the net conversion ratio. In short, the degree to which Upbound Group aligns revenue growth, margin maintenance, and expense control in this quarter will likely shape the stock’s immediate trajectory.

Operational Controllables and Execution Signals

Execution signals that will matter on the call and in the release include the trajectory of operating expenses, clarity around pricing and promotional strategy within merchandise, and the quality of collections within rental operations. The previous quarter’s EBIT outperformance relative to estimates (106.12 million actual vs. 75.19 million estimated) showcased capacity to out-execute expectations. Whether that repeats hinges on the balance of revenue growth and cost discipline this quarter, as estimates already embed an EBIT increase of 2.24% year over year to 98.47 million.

Looking beyond topline numbers, the net profit margin of 1.14% in the prior period sets a baseline; investors will watch for any explicit commentary that frames how margin trends are evolving, particularly as revenue grows faster than EPS. This gap often points to investment, interest, or other below-the-line items that can compress GAAP net conversion. If management demonstrates that these pressures are transient or front-loaded—and quantifies offsetting efficiencies—the narrative could skew toward stabilization even in the face of EPS softness.

Lastly, the composition across rental, merchandise, and subscription/fees influences the quarter’s risk-reward. Rental anchors scale and tends to be steadier; merchandise injects variability through pricing and inventory; subscriptions/fees layer in recurring economics that can smooth the cash profile. The quarter’s print will be judged on how these pieces come together to reinforce revenue growth without disproportionately eroding margin quality.

Scenario Framing for the Quarter

A base-case framework aligns with the estimates: revenue near 1.17 billion (+10.79% year over year), EBIT near 98.47 million (+2.24% year over year), and EPS around $1.00 (-3.14% year over year). In this case, the market’s response will likely hinge on qualitative guidance and any quantified guardrails for expense and margin trajectories. A revenue beat paired with stable or slightly improved margin would mitigate concerns around EPS and could support constructive sentiment, provided costs are well controlled.

A less favorable setup would involve revenue in line with estimates but weaker margin conversion—particularly if merchandise requires promotional support that outstrips the revenue lift or operating expenses trend above expectations. Such a configuration could widen the gap between top-line growth and bottom-line stability. The linchpin remains management’s articulation of margin levers and timing for efficiency gains to re-close the gap in subsequent quarters.

An upside setup exists if revenue outperforms and gross margin is sustained, with incremental benefit from a healthier mix (e.g., merchandise contribution without margin give-up and steady subscription/fees). In that scenario, even if EPS prints flat or slightly down year over year, the visibility into margin and cash generation would anchor sentiment. The actual composition of this quarter’s print will determine how quickly investors bridge from revenue growth to earnings normalization.

Analyst Opinions

Within the specified window from January 1, 2026 to February 12, 2026, we did not identify qualifying, date-compliant analyst previews or rating updates specifically addressing Upbound Group’s upcoming quarterly results. As a result, no majority bullish or bearish ratio can be computed from eligible sources in this period, and institutional views are inconclusive in the near-term window.

Given the absence of fresh, window-compliant previews, the market is likely to reference the company’s own estimate set—revenue up 10.79% year over year to 1.17 billion, EBIT up 2.24% year over year to 98.47 million, and EPS around $1.00 with a -3.14% year-over-year change—while awaiting formal guidance commentary on margin levers, expense run-rate, and the durability of rental collections. In this context, the key to interpretation shifts from external opinion to the clarity of management’s quantitative scaffolding for revenue-to-earnings conversion in the quarter and over the next few reporting periods. For investors assessing the print, the practical proxy for analyst consensus becomes the internal estimate vector detailed above; the post-release discussion should clarify whether the company is positioned to improve net margin conversion as revenue expands, thereby setting expectations for the pace of earnings normalization.