• If you are wondering whether Upbound Group's current share price reflects its underlying value, you are not alone. This article focuses squarely on what the numbers say about the stock.
• The share price closed at US$19.43, with a 9.7% gain over the last 30 days but a 29.4% decline over the past year. This raises questions about how the market is currently pricing the business and its risks.
• Recent news flow for Upbound Group has included ongoing commentary around the rent to own and lease to own retail space, as well as how consumer credit conditions affect these business models. Together, these themes can influence how investors think about the resilience and risk profile of companies like Upbound Group, and help frame recent share price moves.
• On Simply Wall St's valuation checks, Upbound Group currently scores 5 out of 6, which suggests several metrics point to potential undervaluation. Next we will look at the different approaches behind that score, and then finish with a way of thinking about valuation that goes beyond any single model.

Approach 1: Upbound Group Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a company might be worth by projecting its future cash flows and then discounting those back to today’s value.

For Upbound Group, the model used here is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month Free Cash Flow is around $140.9 million. Looking ahead, analyst and extrapolated estimates point to Free Cash Flow of $336 million in 2029, with a series of annual projections in between. Simply Wall St provides detailed yearly estimates from 2026 to 2035, some based on analyst inputs and some extrapolated growth rates, all expressed in dollars and then discounted back to present value.

When these projected and discounted cash flows are added up, the DCF model suggests an estimated intrinsic value of about $58.69 per share. Compared to the recent share price of $19.43, this implies an intrinsic discount of 66.9%, which indicates that the stock screens as undervalued on this framework.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Upbound Group is undervalued by 66.9%. Track this in your watchlist or portfolio, or discover 876 more undervalued stocks based on cash flows.

Approach 2: Upbound Group Price vs Earnings

For a profitable business, the P/E ratio is a straightforward way to link what you pay for each share to the earnings that support it. It helps you see how many dollars investors are currently willing to pay for one dollar of annual earnings.

What counts as a “normal” P/E depends on how the market views a company’s growth prospects and risk. Higher expected growth or lower perceived risk can justify a higher multiple, while slower growth or higher risk usually lines up with a lower one.

Upbound Group currently trades on a P/E of 13.32x. That sits below the Specialty Retail industry average of 20.72x and the peer average of 24.23x. Simply Wall St also calculates a “Fair Ratio” of 23.95x, which is the P/E level that might be expected given factors such as the company’s earnings profile, industry, profit margins, market cap and specific risks.

This Fair Ratio aims to be more tailored than a simple comparison against peers or industry averages, because it adjusts for those company specific features rather than treating all retailers as the same.

Since Upbound Group’s current P/E of 13.32x is well below the Fair Ratio of 23.95x, the stock screens as undervalued on this metric.

Result: UNDERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1444 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Upbound Group Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which let you set the story behind the numbers by linking your view on a company’s future revenue, earnings and margins to a financial forecast and a fair value that you can compare with today’s price.

On Simply Wall St’s Community page, used by millions of investors, a Narrative is your short, structured view of a company. You outline what you think is driving the business, plug in your assumptions, and instantly see how that translates into a Fair Value that sits side by side with the current share price so you can decide whether the gap is significant enough for you to consider your next steps.

Narratives are kept current because they update when new information, such as earnings or news, is added to the platform. For Upbound Group, that might mean one investor builds a cautious Narrative with lower margins and a lower Fair Value, while another assumes stronger cash generation and arrives at a much higher Fair Value, both using the same tool but telling very different stories.

Do you think there's more to the story for Upbound Group? Head over to our Community to see what others are saying!

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.