The Bull Case For Upbound Group (UPBD) Could Change Following Q2 Revenue Gains Amid Profit Decline

Simply Wall St.
Aug 09
  • Upbound Group recently reported its second quarter 2025 earnings, showing sales of US$904.58 million and revenue of US$1.16 billion, both higher than the prior year, while net income for the period declined to US$15.49 million from US$33.95 million previously.
  • The results highlight significant top-line gains in Acima and Brigit from digital product expansion, but profitability was pressured by operational challenges in other segments such as Rent-A-Center.
  • We’ll consider how the dual trend of revenue growth and declining net income reshapes Upbound Group’s investment narrative and future outlook.

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Upbound Group Investment Narrative Recap

To be a shareholder in Upbound Group, you need to believe in the company’s ability to deliver long-term value by expanding digital leasing options and broadening its customer base, particularly through Acima and Brigit. The latest quarterly results reinforce revenue momentum but highlight profitability concerns, especially as growing sales came with a significant drop in net income. While the digital-driven upside remains a key catalyst in the near term, earnings pressure from operational issues in Rent-A-Center currently stands out as the most important risk; the latest results make this risk more visible rather than materially changing it.

One recent announcement that ties directly to these results is the launch of Acima’s virtual lease card, alongside new credit products in Brigit. This move is designed to reinforce the company’s digital transformation, which is central to capturing more revenue, a bright spot reflected in segment growth despite headwinds elsewhere. Yet, as revenue growth becomes increasingly reliant on successful execution in digital channels, maintaining profitability amid operational challenges remains a major focal point for investors.

However, with results showing widening cracks in net income, investors should also be aware that…

Read the full narrative on Upbound Group (it's free!)

Upbound Group's narrative projects $4.8 billion in revenue and $278.5 million in earnings by 2028. This requires 3.9% yearly revenue growth and a $197.3 million increase in earnings from $81.2 million today.

Uncover how Upbound Group's forecasts yield a $36.25 fair value, a 68% upside to its current price.

Exploring Other Perspectives

UPBD Community Fair Values as at Aug 2025

Fair value estimates from four Simply Wall St Community members range from US$34.50 to US$62.89 per share. Some see strong potential in new digital initiatives, though concerns about declining profitability prompt a closer look at future earnings quality and margin trends.

Explore 4 other fair value estimates on Upbound Group - why the stock might be worth just $34.50!

Build Your Own Upbound Group Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

  • A great starting point for your Upbound Group research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.
  • Our free Upbound Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Upbound Group's overall financial health at a glance.

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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.

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