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Avis Budget (CAR)
NASDAQ:CAR
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Avis Budget (CAR) AI Stock Analysis

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CAR

Avis Budget

(NASDAQ:CAR)

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Neutral 44 (OpenAI - 4o)
Rating:44Neutral
Price Target:
$151.00
▼(-5.04% Downside)
Avis Budget's overall stock score is primarily impacted by significant financial challenges, including high leverage and negative equity. While there are positive developments in cash flow and strategic initiatives like Avis First and the Waymo partnership, these are overshadowed by operational hurdles and valuation concerns. The technical analysis also suggests a neutral to slightly bearish outlook, contributing to the overall cautious stance.
Positive Factors
Cash Generation Ability
Avis Budget's transition to positive free cash flow indicates strong cash generation capabilities, enhancing its ability to invest in growth and manage debt.
Strategic Partnerships
The partnership with Waymo positions Avis Budget in the autonomous vehicle space, leveraging its fleet management expertise for future growth.
Product Innovation
The launch of Avis First enhances the company's product portfolio, targeting high-value customers and potentially boosting revenue in premium segments.
Negative Factors
High Leverage
High leverage and negative equity pose significant financial risks, limiting financial flexibility and increasing vulnerability to economic downturns.
Operational Challenges
Fleet recalls and tariff uncertainties disrupt operations and revenue, challenging Avis Budget's ability to maintain fleet efficiency and profitability.
Declining Revenue
Inconsistent revenue growth reflects challenges in market demand and competitive pressures, potentially impacting long-term financial performance.

Avis Budget (CAR) vs. SPDR S&P 500 ETF (SPY)

Avis Budget Business Overview & Revenue Model

Company DescriptionAvis 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 MoneyAvis Budget generates revenue primarily through its vehicle rental operations. The company charges customers for the rental of vehicles on a daily, weekly, or monthly basis, with pricing varying based on vehicle type, rental duration, and location. Key revenue streams include not only rental fees but also ancillary services such as insurance, fuel options, and GPS rentals. Additionally, Avis Budget benefits from partnerships with travel agencies, airlines, and hotels, allowing it to reach a broader customer base and offer bundled services. The company also generates income through its Zipcar brand, providing car-sharing services that cater to urban customers looking for flexible transportation options. Furthermore, Avis Budget's fleet management solutions for businesses contribute to its overall revenue, as companies frequently require reliable and efficient vehicle management services.

Avis Budget Earnings Call Summary

Earnings Call Date:Jul 29, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 03, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strategic innovations such as Avis First and a significant partnership with Waymo, indicating forward-looking growth opportunities. However, the company is currently facing operational challenges due to recalls and tariff uncertainties, which are impacting financial performance and fleet management.
Q2-2025 Updates
Positive Updates
Launch of Avis First
Avis introduced a new premium product offering called Avis First, aimed at providing a first-class rental experience with concierge service and premium vehicles. The service is already live in over a dozen locations and is expected to expand to over 50 markets by the end of the year.
Waymo Partnership in Dallas
Avis has partnered with Waymo to manage a fleet of fully electric autonomous vehicles in Dallas. This partnership is part of a long-term strategy to expand into the autonomous vehicle space, capitalizing on Avis's core competencies in fleet management.
Negative Updates
Impact of Recalls and Tariffs
Recalls have affected 4% of Avis's Americas fleet, impacting some of their highest revenue segments. Additionally, tariff uncertainties have delayed new vehicle deliveries, affecting fleet rotation and depreciation gains.
Challenges in Pricing and Demand
Pricing remains challenged with more pressure on pricing than volume, similar to trends seen in the airline and hotel industries. The company is also facing issues with vehicle deliveries affecting their ability to capitalize on used car market gains.
Company Guidance
During the second quarter 2025 earnings call for Avis Budget Group, the company provided guidance indicating an expected EBITDA range of $900 million to $1 billion for the second half of the year. The guidance reflects challenges such as delayed fleet rotation due to auto tariffs and a significant recall affecting 4% of their Americas fleet, particularly impacting high RPD segments like transit and mini vans. Despite these issues, the company anticipates some RPD improvement due to tightening industry supply. Avis Budget is also focusing on structural growth through initiatives such as the launch of Avis First, a premium product offering, and a partnership with Waymo in Dallas for autonomous vehicle management, aiming to enhance long-term shareholder value.

Avis Budget Financial Statement Overview

Summary
Avis Budget faces significant financial challenges with high leverage and negative equity, posing substantial risks. The income statement reflects inconsistent profitability and declining revenue. However, the company has shown improvement in cash flow, which is a positive aspect.
Income Statement
40
Negative
Avis Budget has experienced volatility in its net income, with a significant net loss of -$2.22 billion in the TTM (Trailing-Twelve-Months) period. The gross profit margin stands at 46.56%, indicating efficient cost management. However, the net profit margin is heavily negative, showing profitability challenges. Revenue growth has been inconsistent, with a decline from the previous periods, and EBIT and EBITDA margins have decreased, suggesting declining operational efficiency.
Balance Sheet
30
Negative
Avis Budget's balance sheet shows high leverage with a negative stockholders' equity of -$2.75 billion, indicating insolvency risk. The debt-to-equity ratio is not meaningful due to negative equity, and the equity ratio is also negative. These factors highlight significant financial risk. Return on Equity is not calculable due to negative equity, further emphasizing financial instability.
Cash Flow
50
Neutral
The company has shown improvement in free cash flow, shifting from negative to positive in the TTM period, with a free cash flow of $347 million. Operating cash flow remains robust, significantly exceeding net income, indicating strong cash generation capabilities despite net losses. However, the free cash flow to net income ratio is still challenging due to negative net income.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue11.61B11.62B12.01B11.99B9.31B5.40B
Gross Profit5.41B3.00B4.77B10.76B7.80B3.72B
EBITDA1.08B2.67B5.66B7.15B4.74B2.17B
Net Income-2.22B-1.82B1.63B2.76B1.28B-684.00M
Balance Sheet
Total Assets10.16B29.04B32.57B25.93B22.60B17.54B
Cash, Cash Equivalents and Short-Term Investments541.00M534.00M555.00M570.00M534.00M692.00M
Total Debt8.71B26.04B26.45B20.92B17.80B13.66B
Total Liabilities12.39B31.36B32.91B26.63B22.81B17.69B
Stockholders Equity-2.75B-2.33B-349.00M-703.00M-220.00M-155.00M
Cash Flow
Free Cash Flow-8.41B-6.54B-11.63B576.00M-2.59B3.95B
Operating Cash Flow3.50B3.52B3.83B4.71B3.49B691.00M
Investing Cash Flow-4.15B-2.75B-7.35B-4.30B-6.31B3.18B
Financing Cash Flow654.00M-781.00M3.51B-360.00M2.69B-4.04B

Avis Budget Technical Analysis

Technical Analysis Sentiment
Positive
Last Price159.01
Price Trends
50DMA
162.75
Negative
100DMA
153.85
Positive
200DMA
117.72
Positive
Market Momentum
MACD
0.27
Negative
RSI
49.73
Neutral
STOCH
49.98
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CAR, the sentiment is Positive. The current price of 159.01 is above the 20-day moving average (MA) of 157.82, below the 50-day MA of 162.75, and above the 200-day MA of 117.72, indicating a neutral trend. The MACD of 0.27 indicates Negative momentum. The RSI at 49.73 is Neutral, neither overbought nor oversold. The STOCH value of 49.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CAR.

Avis Budget Risk Analysis

Avis Budget disclosed 32 risk factors in its most recent earnings report. Avis Budget reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Avis Budget Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$7.75B16.1016.46%1.76%3.68%6.61%
76
Outperform
$1.27B6.3932.11%1.59%5.18%109.28%
66
Neutral
$3.85B35.2710.61%0.99%-2.34%-37.24%
50
Neutral
$4.00B135.231.20%2.30%11.41%-92.67%
47
Neutral
$2.10B-0.82505.56%-7.58%-225.06%
44
Neutral
$5.68B8.2678.26%-2.25%-395.93%
63
Neutral
$10.79B15.437.44%2.01%2.89%-14.66%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CAR
Avis Budget
159.01
72.34
83.47%
PRG
PROG Holdings
32.04
-14.08
-30.53%
WSC
WillScot Mobile Mini Holdings
21.14
-15.98
-43.05%
HRI
Herc Holdings
120.33
-33.78
-21.92%
R
Ryder System
189.95
49.45
35.20%
HTZ
Hertz Global
6.77
3.53
108.95%

Avis Budget Corporate Events

Business Operations and StrategyExecutive/Board Changes
Avis Budget Amends Cooperation Agreement with SRS
Neutral
Sep 8, 2025

On September 5, 2025, Avis Budget Group, Inc. amended its cooperation agreement with SRS Investment Management, LLC, increasing SRS’s voting cap from 35% to 45%. The amendment also sets the board size at five or six directors as long as SRS owns at least 10% of voting securities, with no more than two directors affiliated with SRS. Additionally, restrictions are placed on share transfers to maintain board composition and voting structures.

The most recent analyst rating on (CAR) stock is a Hold with a $153.00 price target. To see the full list of analyst forecasts on Avis Budget stock, see the CAR Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 19, 2025