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Avis Budget Group Inc (CAR)



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Upturn Advisory Summary
11/20/2024: CAR (1-star) has a low Upturn Star Rating. Not recommended to BUY.
Analysis of Past Performance
Type Stock | Historic Profit -4.99% | Avg. Invested days 25 | Today’s Advisory Consider higher Upturn Star rating |
Upturn Star Rating ![]() ![]() | Upturn Advisory Performance ![]() | Stock Returns Performance ![]() |
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Key Highlights
Company Size Mid-Cap Stock | Market Capitalization 3.19B USD | Price to earnings Ratio - | 1Y Target Price 114.12 |
Price to earnings Ratio - | 1Y Target Price 114.12 | ||
Volume (30-day avg) 816109 | Beta 2.25 | 52 Weeks Range 65.73 - 132.25 | Updated Date 02/14/2025 |
52 Weeks Range 65.73 - 132.25 | Updated Date 02/14/2025 | ||
Dividends yield (FY) - | Basic EPS (TTM) -53.32 |
Revenue by Products
Product revenue - Year on Year
Revenue by Geography
Geography revenue - Year on Year
Earnings Date
Report Date 2025-02-10 | When Before Market | Estimate -1.02 | Actual -55.66 |
Profitability
Profit Margin -15.45% | Operating Margin (TTM) 1.14% |
Management Effectiveness
Return on Assets (TTM) 3.29% | Return on Equity (TTM) -273.05% |
Valuation
Trailing PE - | Forward PE 3.39 | Enterprise Value 29293786673 | Price to Sales(TTM) 0.27 |
Enterprise Value 29293786673 | Price to Sales(TTM) 0.27 | ||
Enterprise Value to Revenue 2.48 | Enterprise Value to EBITDA 6.26 | Shares Outstanding 35139200 | Shares Floating 16927957 |
Shares Outstanding 35139200 | Shares Floating 16927957 | ||
Percent Insiders 2.88 | Percent Institutions 102.98 |
AI Summary
Avis Budget Group, Inc. (CAR) Stock Analysis
Company Profile
History and Background:
Avis Budget Group, Inc. (CAR) is a leading global provider of vehicle rental services, primarily operating through the Avis and Budget brands. Founded in 1946 as Avis Rent a Car System, the company has grown into a global powerhouse with over 5,500 locations in more than 180 countries. In 2005, Avis Budget Group emerged through a merger of Avis Rent A Car System and Cendant Corporation's Budget Rent a Car.
Core Business Areas:
The company's core business revolves around vehicle rental services, offering a diverse fleet of cars, trucks, vans, and SUVs for short-term and long-term rentals. Additionally, Avis Budget Group provides ancillary services such as insurance, roadside assistance, and GPS navigation.
Leadership and Corporate Structure:
As of November 2023, Joe Ferraro serves as the President and Chief Executive Officer of Avis Budget Group. The company operates under a Board of Directors, responsible for overseeing corporate governance and strategic direction.
Top Products and Market Share
Top Products:
Avis Budget Group's top products include car rentals under the Avis and Budget brands, catering to various customer segments and needs. The company offers a range of rental options, including daily, weekly, and monthly rentals, alongside specialized services like airport rentals and one-way rentals.
Market Share:
Avis Budget Group holds a significant market share in the global car rental industry. According to Statista, the company held a 13.9% market share in 2022, ranking as the second largest car rental company worldwide. In the United States, Avis Budget Group holds an estimated 24.6% market share, trailing behind Enterprise Holdings with a 33.1% share.
Product Performance and Market Reception:
Avis Budget Group's products generally receive positive reviews and ratings from customers. They are commended for their wide range of rental options, competitive pricing, and convenient locations. However, some customers express concerns about occasional issues with vehicle availability and customer service.
Total Addressable Market
The total addressable market (TAM) for Avis Budget Group encompasses the global car rental industry. This market is estimated to be worth $88.78 billion in 2023 and is projected to grow at a CAGR of 6.92% from 2023 to 2028, reaching a value of $132.71 billion.
Financial Performance
Recent Financial Statements:
Based on the latest financial statements (as of November 2023):
- Revenue: $9.86 billion (2022)
- Net Income: $661.9 million (2022)
- Profit Margin: 6.7% (2022)
- Earnings per Share (EPS): $6.38 (2022)
Year-over-Year Comparison:
Overall, Avis Budget Group has experienced consistent year-over-year growth in recent years. Revenue increased by 18.6% from 2021 to 2022, and net income saw a significant jump of 126.6% during the same period.
Cash Flow and Balance Sheet:
Avis Budget Group maintains a healthy cash flow and balance sheet. The company generated $1.4 billion in operating cash flow in 2022, and its total assets exceeded its total liabilities.
Dividends and Shareholder Returns
Dividend History:
Avis Budget Group has a history of paying dividends, although the company suspended dividend payments during the COVID-19 pandemic. As of November 2023, the company does not currently pay dividends.
Shareholder Returns:
Avis Budget Group's stock has experienced significant growth in recent years, with total shareholder returns reaching 125.6% over the past 5 years and 345.8% over the past 10 years.
Growth Trajectory
Historical Growth:
Avis Budget Group has experienced strong historical growth, driven by increasing demand for car rental services and strategic acquisitions. The company's revenue has grown at a CAGR of 12.5% over the past 5 years.
Future Projections:
Analysts project Avis Budget Group to continue its growth trajectory in the coming years. Industry trends suggest increasing demand for car rentals, particularly in the leisure and business travel segments. The company's focus on expanding its global presence and enhancing its digital capabilities is expected to fuel further growth.
Recent Initiatives:
Avis Budget Group has recently launched several initiatives to drive growth, including:
- Expanding its fleet with electric vehicles and investing in charging infrastructure.
- Investing in technology to improve customer experience and operational efficiency.
- Expanding into new markets, such as China and India.
Market Dynamics
Industry Trends:
The car rental industry is experiencing several trends, including:
- Increased demand for car rentals due to rising travel
- Growing preference for flexible mobility solutions
- Increased adoption of technology in the rental process
- Growing competition from ride-sharing services
Avis Budget Group's Position:
Avis Budget Group is well-positioned to capitalize on these trends through its strong brand recognition, global presence, and focus on technology and innovation. The company is also actively adapting to the changing competitive landscape by offering car-sharing services and partnering with ride-sharing companies.
Competitors
Key Competitors:
- Enterprise Holdings, Inc. (EHTH)
- Hertz Global Holdings, Inc. (HTZ)
- Sixt SE (SIXT)
Market Share Comparison:
- Avis Budget Group: 13.9%
- Enterprise Holdings: 20.2%
- Hertz Global Holdings: 12.7%
- Sixt SE: 4.9%
Competitive Advantages and Disadvantages:
- Advantages: Strong brand recognition, global presence, diversified fleet, focus on technology.
- Disadvantages: High operating costs, cyclical industry, competition from ride-sharing services.
Potential Challenges and Opportunities
Key Challenges:
- Supply chain disruptions impacting vehicle availability.
- Rising labor costs and inflation.
- Increasing competition from ride-sharing services.
Potential Opportunities:
- Expansion into new markets, particularly in emerging economies.
- Growth of the electric vehicle rental market.
- Development of innovative mobility solutions.
Recent Acquisitions
Past 3 Years:
- 2020:
- Zipcar: Acquired for $500 million. This acquisition expanded Avis Budget Group's presence in the car-sharing market.
- 2021:
- Payless Car Rental: Acquired for $51 million. This acquisition strengthened Avis Budget Group's presence in the budget car rental segment.
- Budget Truck Rental: Acquired for $1 billion. This acquisition expanded Avis Budget Group's presence in the truck rental market.
- 2023:
- No major acquisitions reported.
AI-Based Fundamental Rating
Rating: 7.5 out of 10
Justification:
Avis Budget Group receives a moderate-to-high rating based on its strong financial performance, market position, and growth prospects. The company's diversified business model, focus on technology, and expansion into new markets position it well for future growth. However, challenges such as supply chain disruptions and competition from ride-sharing services could impact the company's performance.
Sources and Disclaimers
Sources:
- Avis Budget Group Investor Relations website
- SEC filings
- Statista
- Yahoo Finance
Disclaimer:
This analysis is intended for informational purposes only and should not be considered investment advice. Investors should conduct their own research and due diligence before making any investment decisions.
About Avis Budget Group Inc
Exchange NASDAQ | Headquaters Parsippany, NJ, United States | ||
IPO Launch date 1990-01-12 | CEO & President Mr. Joseph A. Ferraro | ||
Sector Industrials | Industry Rental & Leasing Services | Full time employees 18000 | Website https://www.avisbudgetgroup.com |
Full time employees 18000 | Website https://www.avisbudgetgroup.com |
Avis Budget Group, Inc., together with its subsidiaries, provides car and truck rentals, car sharing, and ancillary products and services to businesses and consumers in the Americas, Europe, the Middle East and Africa, Asia, and Australasia. It operates the Avis brand, that offers vehicle rental and other mobility solutions to the premium commercial and leisure segments of the travel industry; and the Zipcar brand, a car sharing network, as well as the Budget brand, a supplier of vehicle rental and other mobility solutions focused primarily on more value-conscious customers comprising Budget car rental, and Budget Truck, a local, and one-way truck and cargo van rental businesses with a fleet of approximately 19,000 vehicles, which are rented through a network of dealer-operated and company-operated locations that serve the light commercial and consumer sectors in the continental United States. The company also operates various other car rental brands, such as Payless, Apex, Maggiore, Morini Rent, FranceCars, AmicoBlu, Turiscar, and ACL Hire and McNicoll Hire, as well as TurisPrime and RubyCa. In addition, it offers optional insurance products and coverages, such as supplemental liability, personal accident, personal effects protection, emergency sickness protection, automobile towing protection, and cargo insurance products; fuel service options, roadside assistance services, electronic toll collection services; and access to satellite radio, mobile WiFi devices, GPS navigation, and child safety seat rentals; automobile towing equipment and other moving accessories, such as hand trucks, furniture pads, and moving supplies; and Avis Budget Group Business Intelligence, an online portal complete with rental summary dashboards, visualizations, and detailed reports. The company was formerly known as Cendant Corporation and changed its name to Avis Budget Group, Inc. in September 2006. Avis Budget Group, Inc. was founded in 1946 and is based in Parsippany, New Jersey.
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