Avis Budget (CAR) AI Stock Analysis

• Market Cap: $4.75B
• Dividend Yield: N/A
• Average Volume (3M): 638.52K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.30
• Revenue Growth: -1.22%
• EPS Growth: -639.34%
• Country: US
• Employees: 17,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Rental & Leasing Services
• EPS (TTM): 10.96
• Shares Outstanding: 35,196,990
• 10 Day Avg. Volume: 700,253
• 30 Day Avg. Volume: 638,524
• PEG Ratio: <0.01
• Price to Book (P/B): -1.23
• Price to Sales (P/S): 0.24
• P/FCF Ratio: -0.44
• Enterprise Value/Market Cap: 7.11
• Enterprise Value/Revenue: 2.89
• Enterprise Value/Gross Profit: 11.75
• Enterprise Value/Ebitda: 14.29
• 1Y Price Target: $122.00
• Price Target Upside: -9.56% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 6
• EPS Forecast (FY): 7.25
• Revenue Forecast (FY): $11.74B

• Rating: 41 Neutral
• Price Target: $139.00 ▲(3.04% Upside)

Avis Budget's overall stock score is primarily impacted by its financial performance and valuation concerns. High leverage and negative profitability weigh heavily on the score. Technical analysis indicates bearish momentum, further contributing to the low score. Despite some positive aspects from the earnings call, the significant challenges faced by the company overshadow these, resulting in a low overall score.

Positive Factors

Revenue Growth

The company's ability to achieve revenue growth after eight quarters indicates resilience and potential for market recovery.

International Segment Performance

Strong international performance suggests effective strategic shifts and potential for sustained profitability in global markets.

Customer Experience Initiative

High customer satisfaction from new initiatives can enhance brand loyalty and competitive positioning, supporting long-term growth.

Negative Factors

High Leverage

High leverage and negative equity pose solvency risks, limiting financial flexibility and increasing vulnerability to economic downturns.

Negative Free Cash Flow

Negative free cash flow indicates liquidity issues, potentially hindering the company's ability to invest in growth and manage debt.

Vehicle Recall Impact

Ongoing vehicle recalls increase operational costs and reduce fleet efficiency, impacting profitability and operational stability.

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 car rental operations, which include daily, weekly, and monthly rental agreements. The company earns money by charging customers for the rental of vehicles, along with additional fees for insurance, fuel options, and GPS navigation systems. Key revenue streams include airport rentals, where they often command higher prices due to convenience, and off-airport rentals, which cater to local customers. Moreover, Avis Budget has partnerships with airlines, hotels, and travel agencies, allowing them to offer bundled services and promotional deals that attract more customers. The company's car sharing services through Zipcar also contribute to its earnings, providing an alternative revenue stream from individuals seeking short-term vehicle access without the commitment of ownership.

Avis Budget Financial Statement Overview

Summary

Avis Budget's financial performance is mixed. While revenue growth is strong at 33.6%, profitability is a concern with negative net profit and EBIT margins. The balance sheet shows high leverage with negative equity, posing solvency risks. Cash flow generation is moderate but declining, indicating potential liquidity issues.

Income Statement

Avis Budget's income statement shows mixed results. The TTM (Trailing-Twelve-Months) data indicates a significant revenue growth rate of 33.6%, which is a positive sign. However, the company is struggling with profitability, as evidenced by a negative net profit margin of -18.02% and a negative EBIT margin of -14.66%. The gross profit margin is relatively strong at 53.97%, but the negative net income suggests challenges in managing expenses or other financial obligations.

Balance Sheet

The balance sheet reflects a high-risk financial structure with a negative stockholders' equity and a concerning debt-to-equity ratio of -3.62 in the TTM period. This indicates high leverage and potential solvency issues. The return on equity is positive at 81.61%, but this is primarily due to the negative equity, which distorts the ratio. The equity ratio is negative, highlighting the company's reliance on debt financing.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth by -122.09% in the TTM period, indicating potential liquidity issues. However, the operating cash flow to net income ratio is strong at 1.15, suggesting that the company is generating sufficient cash from operations relative to its net income. The free cash flow to net income ratio is 0.51, which is moderate but indicates some ability to generate cash relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.70B	11.79B	12.01B	11.99B	9.31B	5.40B
Gross Profit	2.87B	3.00B	3.93B	4.77B	3.39B	596.00M
EBITDA	2.36B	2.67B	6.43B	7.15B	4.74B	2.17B
Net Income	-2.10B	-1.82B	1.63B	2.76B	1.28B	-684.00M
Balance Sheet
Total Assets	32.52B	29.95B	33.42B	25.93B	22.60B	17.54B
Cash, Cash Equivalents and Short-Term Investments	568.00M	537.00M	559.00M	572.00M	537.00M	693.00M
Total Debt	28.59B	26.04B	26.45B	20.92B	17.80B	13.66B
Total Liabilities	34.89B	32.27B	33.76B	26.63B	22.81B	17.69B
Stockholders Equity	-2.40B	-2.33B	-349.00M	-703.00M	-220.00M	-155.00M
Cash Flow
Free Cash Flow	-9.87B	-6.54B	-11.63B	576.00M	-2.59B	3.95B
Operating Cash Flow	3.63B	3.52B	3.83B	4.71B	3.49B	691.00M
Investing Cash Flow	-4.71B	-2.75B	-7.35B	-4.30B	-6.31B	3.18B
Financing Cash Flow	1.07B	-781.00M	3.51B	-360.00M	2.69B	-4.04B

Avis Budget Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 134.90
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 134.9 is above the 20-day moving average (MA) of 132.70, below the 50-day MA of 138.35, and above the 200-day MA of 133.45, indicating a neutral trend. The MACD of -1.65 indicates Negative momentum. The RSI at 51.43 is Neutral, neither overbought nor oversold. The STOCH value of 62.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CAR.

Avis Budget Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
R	73 Outperform	$7.95B	16.71	16.26%	1.75%	1.68%	9.91%
PRG	71 Outperform	$1.19B	7.66	24.56%	1.72%	3.71%	9.14%
WSC	69 Neutral	$3.54B	16.09	21.15%	1.44%	-3.64%	867.62%
HRI	67 Neutral	$5.19B	-61.98	-4.05%	1.79%	19.40%	-120.47%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
HTZ	50 Neutral	$1.71B	-1.59	-567.03%	―	-7.36%	62.27%
CAR	41 Neutral	$4.75B	-2.26	―	―	-1.22%	-639.34%

Avis Budget Corporate Events

Avis Budget Issues $793.2 Million in Asset-Backed Securities

On September 16, 2025, Avis Budget‘s subsidiary, Avis Budget Rental Car Funding (AESOP) LLC, issued $793.2 million in asset-backed securities with maturities of three and five years. These securities, secured by vehicles in the company’s domestic fleet, are structured into various classes of notes, with some retained for potential future sale. The issuance aims to comply with U.S. risk retention rules and involves commercial and investment banking services from various affiliates.

Avis Budget Amends Cooperation Agreement with SRS

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.