Conn's, Inc. (CONN) | Investment Case

1. Company Snapshot

1.a. Company Description

Conn's, Inc.operates as a specialty retailer of durable consumer goods and related services in the United States.It operates through two segments, Retail and Credit.

The company's stores offer furniture and mattress, including furniture and related accessories for the living room, dining room, and bedroom, as well as flat and other mattresses; and home appliances, such as refrigerators, freezers, washers, dryers, dishwashers, and ranges.Its stores also provide consumer electronics comprising LED, OLED, QLED, 4K Ultra HD, 8K televisions, gaming products, video game consoles, and home theater and portable audio equipment; and home office products, including computers, tablets, monitors, and accessories.In addition, the company offers short- and medium-term financing to its retail customers; and product support services, which comprise next-day delivery and installation services, credit insurance products, product repair services, and repair service agreements.

As of July 27, 2022, it operated approximately 160 retail locations in Alabama, Arizona, Colorado, Florida, Georgia, Louisiana, Mississippi, Nevada, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, and Virginia.Conn's, Inc.was founded in 1890 and is headquartered in The Woodlands, Texas.

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1.b. Last Insights on CONN

The recent stock performance of Conn's, Inc. has been negatively driven by several factors. The company is facing an investigation by law firms, including Bronstein, Gewirtz & Grossman, LLC and The Law Offices of Frank R. Cruz, regarding potential securities law violations. Additionally, Conn's is considering closing up to 100 of its stores, which could negatively impact its operations and profitability. The company's debt load is also a concern, as it has hired a financial adviser to help rework its debt. These factors have likely contributed to the company's recent struggles and may continue to weigh on its stock performance in the near term.

1.c. Company Highlights

Last Price	0.1
Change Percentage	-46.40%
Open	0.12
Previous Close	0.18
Market Cap ( Millions)	2
Volume	2348765
Year High	5.19
Year Low	0.1
M A 50	1.67
M A 200	3.23

FCF Yield	-4215.65%
Dividend Yield	0.00%
ROE	-15.38%
Debt / Equity	336.13%
Net Debt / EBIDTA	-4429.85%
Price To Book	0.0
Price Earnings Ratio	-0.03
Price To FCF	-0.02
Price To sales	0.0
EV / EBITDA	-44.37

2. Transcript Summary

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3. NewsRoom

Conns Inc Shareholders With Losses Over $100,000 Encouraged To Contact The Schall Law Firm About Securities Fraud Investigation

Aug -19

Source: accesswire.com

The Schall Law Firm Urges Conns Inc Investors With Losses Over $100,000 To Contact The Firm

Aug -18

Source: accesswire.com

The Schall Law Firm Seeks Conns Inc Stockholders With Losses Over $100,000 To Reach Out To The Firm

Aug -17

Source: accesswire.com

The Schall Law Firm Encourages Conns Inc Investors With Losses Over $100,000 To Contact The Firm

Aug -16

Source: accesswire.com

The Schall Law Firm Seeks Conns Inc Investors With Losses Over $100,000 To Reach Out To The Firm

Aug -15

Source: accesswire.com

Conn's, Inc. (CONN) Investigation: Bronstein, Gewirtz & Grossman, LLC Encourages Investors to Seek Compensation for Alleged Wrongdoings

Aug -15

Source: accesswire.com

The Schall Law Firm Encourages Conns Inc Investors With Losses Over $100,000 To Reach Out To The Firm

Aug -15

Source: accesswire.com

Conn's, Inc. (CONN) Investigation: Bronstein, Gewirtz & Grossman, LLC Encourages Investors to Seek Compensation for Alleged Wrongdoings

Aug -14

Source: accesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.27%)

6. Segments

Retail

Expected Growth: 3.5%

Conn's, Inc. retail segment growth of 3.5% is driven by increasing consumer spending on electronics and furniture, expansion into new markets, and strategic partnerships to enhance product offerings. Additionally, the company's focus on providing affordable payment options and superior customer service has contributed to its growth momentum.

Credit

Expected Growth: 2.5%

Conn's, Inc. credit growth of 2.5% is driven by increasing consumer spending, expansion into new markets, and strategic partnerships. Additionally, the company's focus on providing affordable financing options and its ability to effectively manage risk have contributed to its growth. Furthermore, the rise of online shopping and the need for financing options for big-ticket items have also fueled the growth of Conn's credit segment.

Eliminations

Expected Growth: 0.0%

Conn's, Inc. exhibits stagnant growth with 0.0% eliminations, driven by flat sales, lack of innovation, and intense competition in the retail industry. Additionally, high operating expenses, inefficient supply chain management, and failure to adapt to changing consumer preferences contribute to the stagnant growth.

7. Detailed Products

Furniture

Conn's, Inc. offers a wide range of furniture products, including sofas, loveseats, chairs, tables, desks, beds, mattresses, and more from top brands.

Appliances

Conn's sells a variety of appliances, including refrigerators, ovens, dishwashers, washing machines, dryers, and more from leading brands like Samsung, LG, and Whirlpool.

Consumer Electronics

Conn's offers a range of consumer electronics, including TVs, soundbars, headphones, smartphones, laptops, tablets, and gaming consoles from top brands like Sony, Samsung, and Apple.

Home Office

Conn's sells a variety of home office products, including computers, printers, software, and office furniture from brands like HP, Dell, and Microsoft.

Fitness and Wellness

Conn's offers a range of fitness and wellness products, including treadmills, ellipticals, exercise bikes, and fitness trackers from brands like ProForm and NordicTrack.

Heating and Cooling

Conn's sells a variety of heating and cooling products, including HVAC systems, air conditioners, and heaters from brands like Trane and Carrier.

Credit Services

Conn's offers credit services, including financing options and credit cards, to help customers afford the products they need.

8. Conn's, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Conn's, Inc. is medium due to the presence of alternative products and services in the market. While Conn's offers a unique value proposition, customers may still opt for substitutes, which could impact the company's sales and revenue.

Bargaining Power Of Customers

The bargaining power of customers is high due to the availability of alternative products and services in the market. Customers have the power to negotiate prices and demand better services, which could impact Conn's pricing strategy and revenue.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the company's strong relationships with its suppliers and the availability of alternative suppliers in the market. This gives Conn's the upper hand in negotiating prices and terms.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the industry, including the need for significant capital investment and regulatory approvals. This makes it difficult for new companies to enter the market and compete with established players like Conn's.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established players in the market, including Best Buy, Walmart, and others. This leads to intense competition for market share, pricing, and customer loyalty.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	68.33%
Debt Cost	5.95%
Equity Weight	31.67%
Equity Cost	15.73%
WACC	9.05%
Leverage	215.78%

11. Quality Control: Conn's, Inc. passed 3 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Qurate Retail

A-Score: 4.0/10

Value: 9.7

Growth: 1.2

Quality: 5.4

Yield: 5.0

Momentum: 1.0

Volatility: 1.7

1-Year Total Return ->

ThredUp

A-Score: 3.9/10

Value: 4.4

Growth: 4.9

Quality: 3.3

Yield: 0.0

Momentum: 10.0

Volatility: 1.0

1-Year Total Return ->

Olaplex

A-Score: 3.6/10

Value: 8.0

Growth: 4.6

Quality: 5.8

Yield: 0.0

Momentum: 1.5

Volatility: 2.0

1-Year Total Return ->

Conn's

A-Score: 3.6/10

Value: 10.0

Growth: 1.8

Quality: 4.4

Yield: 0.0

Momentum: 5.0

Volatility: 0.3

1-Year Total Return ->

GrowGen

A-Score: 3.4/10

Value: 9.4

Growth: 2.1

Quality: 4.2

Yield: 0.0

Momentum: 3.5

Volatility: 1.3

1-Year Total Return ->

iPower

A-Score: 2.8/10

Value: 9.6

Growth: 1.6

Quality: 4.4

Yield: 0.0

Momentum: 1.0

Volatility: 0.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

20.86%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.05%

Conn's, Inc. - US2082421072

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on CONN

1.c. Company Highlights

Cheaper

Lower Growth

More Volatile

Earnings Beats

Revenues Miss

Earnings Miss

Weak Momentum

Average Growth

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.27%)

6. Segments

Retail

Expected Growth: 3.5%

Credit

Expected Growth: 2.5%

Eliminations

Expected Growth: 0.0%

7. Detailed Products

Furniture

Appliances

Consumer Electronics

Home Office

Fitness and Wellness

Heating and Cooling

Credit Services

8. Conn's, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Conn's, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

0.1$

Current Price

0.1$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA