Avis Budget (CAR) AI Stock Analysis

• Market Cap: $2.13B
• Dividend Yield: N/A
• Average Volume (3M): 1.16M
• Price to Earnings (P/E): 8.3
• Beta (1Y): 1.92
• Revenue Growth: -1.82%
• EPS Growth: -219.91%
• Country: US
• Employees: 17,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Rental & Leasing Services
• EPS (TTM): -51.80
• Shares Outstanding: 35,111,843
• 10 Day Avg. Volume: 1,661,237
• 30 Day Avg. Volume: 1,157,471
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.18
• Price to Cash Flow (P/CF): 0.70
• P/FCF Ratio: 0.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $114.17
• Price Target Upside: 88.21% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

Avis Budget's overall stock score is low, primarily due to weak financial performance marked by high leverage and negative income. Bearish technical indicators and poor valuation further contribute to the low score. While there is some positive sentiment from the earnings call regarding future fleet cost improvements, significant operational and financial challenges remain.

Positive Factors

Earnings Recovery

CAR is expected to see an earnings recovery in 2025 with lower fleet costs, relatively stable pricing, good volumes, and productivity and efficiency efforts.

Operational Strategy

CAR repurchased 550,000 shares for $45 million in 4Q, aligning with strategic financial management.

Valuation and Market Position

Analyst maintains a Buy rating on CAR, citing its attractive valuation and potential earnings recovery.

Negative Factors

Financial Performance

Net income missed expectations with a substantial loss, highlighting challenges in managing costs and market conditions.

Fleet Costs

The company experienced a significant fourth-quarter miss with an adjusted EBITDA loss driven by higher fleet costs and weaker revenue per day in the Americas.

Impairment Charge

Avis Budget Group recognized a $2.3 billion non-cash impairment charge due to shortening the useful life of the majority of its vehicles in the Americas.

Avis Budget Business Overview & Revenue Model

Company Description

Avis Budget Group, Inc., together with its subsidiaries, provides car and truck rentals, car sharing, and ancillary products and services to businesses and consumers. It operates the Avis brand, that offers vehicle rental and other mobility solutions to the premium commercial and leisure segments of the travel industry; the Budget Truck brand, a local, and one-way truck and cargo van rental businesses with a fleet of approximately 20,000 vehicles, which are rented through a network of approximately 465 dealer-operated and 385 company-operated locations that serve the consumer and light commercial sectors in the continental United States; and the Zipcar brand, a car sharing network. The company also operates various other car rental brands, such as Budget, Payless, Apex, Maggiore, MoriniRent, FranceCars, Amicoblue, Turiscar, and ACL Hire. In addition, it offers optional insurance products and coverages, such as supplemental liability, personal accident, personal effects protection, emergency sickness protection, and automobile towing protection and cargo insurance products; fuel service options, roadside assistance services, electronic toll collection services, curbside delivery, tablet rentals, access to satellite radio, portable navigation units, and child safety seat rentals; automobile towing equipment and other moving accessories, such as hand trucks, furniture pads, and moving supplies; and Business Intelligence solution, an online portal for corporate travel. Avis Budget Group, Inc. operates in approximately 10,400 locations worldwide. 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 headquartered in Parsippany, New Jersey.

How the Company Makes Money

Avis Budget Group generates revenue primarily through its vehicle rental operations. The company's main revenue streams include rentals of cars and trucks to individual consumers and businesses, as well as membership fees and usage charges for its Zipcar car-sharing service. Additional earnings are derived from sales of ancillary products such as insurance coverage, GPS navigation devices, and fuel purchase options. The company benefits from strategic partnerships with travel agencies, airlines, and online travel platforms, which help to broaden its customer base and increase rental bookings. Avis Budget also engages in fleet sales, selling used vehicles from its rental fleet to the secondary market, which contributes to its overall revenue.

Avis Budget Financial Statement Overview

Summary

Avis Budget's financial health presents a mixed picture. While revenue and operating cash flow show positive aspects, the negative net income and high leverage are significant concerns. The volatility in free cash flow and negative equity highlight financial risks, suggesting a need for improved profitability and balance sheet restructuring.

Income Statement

Avis Budget shows mixed performance on its income statement. While the company achieved significant revenue growth from 2020 to 2023, the recent decline in 2024 is concerning. The gross profit margin is moderate, but net income has turned negative in 2024, leading to a negative net profit margin. EBIT and EBITDA margins have fluctuated, with EBIT showing a strong positive trend until 2024.

Balance Sheet

The balance sheet reveals high leverage, with a negative stockholders' equity and a debt-to-equity ratio that cannot be calculated meaningfully due to the negative equity. This high leverage poses risks, particularly as equity remains negative throughout. Return on equity is not calculable, and the equity ratio is negative, indicating financial instability.

Cash Flow

Cash flow analysis shows a positive trend in operating cash flow, though free cash flow has been volatile. The company managed a strong free cash flow in 2024 compared to the previous year, signaling improvement. However, the ratio of operating cash flow to net income is problematic due to negative net income, indicating potential cash flow sustainability issues.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
11.79B	12.01B	11.99B	9.31B	5.40B
	Gross Profit
5.78B	4.77B	10.76B	7.80B	3.72B
	EBIT
4.42B	3.19B	3.91B	2.13B	-529.00M
	EBITDA
-2.04B	5.66B	7.15B	4.74B	2.17B
	Net Income Common Stockholders
-1.82B	1.63B	2.76B	1.28B	-684.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
534.00M	555.00M	570.00M	534.00M	692.00M
	Total Assets
9.67B	32.57B	25.93B	22.60B	17.54B
	Total Debt
7.88B	26.45B	20.92B	17.80B	13.66B
	Net Debt
7.34B	25.90B	20.35B	17.27B	12.97B
	Total Liabilities
11.05B	32.91B	26.63B	22.81B	17.69B
	Stockholders Equity
-2.33B	-349.00M	-703.00M	-220.00M	-155.00M
Cash Flow		Free Cash Flow
3.32B	-11.63B	576.00M	-2.59B	3.95B
	Operating Cash Flow
3.52B	3.83B	4.71B	3.49B	691.00M
	Investing Cash Flow
-190.00M	-7.35B	-4.30B	-6.31B	3.18B
	Financing Cash Flow
-781.00M	3.51B	-360.00M	2.69B	-4.04B

Avis Budget Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 60.66
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CAR, the sentiment is Negative. The current price of 60.66 is below the 20-day moving average (MA) of 69.87, below the 50-day MA of 81.60, and below the 200-day MA of 89.86, indicating a bearish trend. The MACD of -7.30 indicates Positive momentum. The RSI at 35.89 is Neutral, neither overbought nor oversold. The STOCH value of 29.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CAR.

Avis Budget Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UAL	80 Outperform	$24.51B	7.94	28.63%	―	6.23%	20.08%
DAL	70 Outperform	$30.21B	8.77	26.19%	1.18%	6.19%	-25.26%
R	65 Neutral	$5.91B	12.81	15.71%	2.22%	7.25%	25.82%
Sector *	62 Neutral	$8.22B	13.91	2.36%	3.08%	3.85%	-14.32%
LYFT	61 Neutral	$5.01B	233.98	3.48%	―	31.39%	―
CAR	41 Neutral	$2.13B	8.26	78.26%	―	-1.82%	-219.91%
HTZ	41 Neutral	$1.06B	―	-176.39%	―	-3.44%	-581.59%

Avis Budget Corporate Events

Avis Budget Announces Leadership Changes Amidst Financial Shift

Avis Budget Group announced a leadership transition with CEO Joseph A. Ferraro moving to a Board Advisor role effective June 30, 2025, and Brian J. Choi, Chief Transformation Officer, stepping in as CEO from July 1, 2025. The company also named Jagdeep Pahwa as Executive Chairman effective March 1, 2025. The financial results for 2024 showed a net loss of $1.8 billion and an Adjusted EBITDA of $628 million, reflecting a strategic shift to accelerate fleet rotations in the Americas, which incurred a one-time non-cash impairment of $2.3 billion. Despite these figures, the company remains optimistic about achieving $1 billion in Adjusted EBITDA in 2025, bolstered by strong travel demand.