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Avis Budget (CAR)
NASDAQ:CAR

Avis Budget (CAR) AI Stock Analysis

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CA

Avis Budget

(NASDAQ:CAR)

Rating:59Neutral
Price Target:
$179.00
▲(0.67%Upside)
Avis Budget's overall score is primarily impacted by its financial instability and weak valuation metrics. While technical indicators show strong momentum, the negative net income and high leverage are significant concerns. The earnings call provided some positive strategic insights, but financial challenges remain predominant.
Positive Factors
Financial Performance
Strong EBITDA and free cash flow are expected to allow for the allocation of capital toward shareholder-friendly initiatives.
Market Share
CAR is well positioned to gain share from Hertz.
Negative Factors
Demand Forecast
The forecast for rental days and RPD is reduced due to potential softening in demand.
Operational Challenges
4Q results were affected by disruptions from elections and storms, leading to higher fleet costs and lower volumes.

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 Group generates revenue primarily through its vehicle rental services. The company's key revenue streams include rental fees charged to customers for the use of vehicles, additional fees for services such as GPS navigation, child safety seats, and fuel options, as well as insurance and protection packages. Avis Budget also earns money from selling used vehicles through its fleet management strategy. Significant partnerships with airlines, credit card companies, and travel agencies enhance its revenue by providing a steady flow of customers and facilitating broader market reach. Additionally, the company benefits from its loyalty programs and corporate accounts, which contribute to a consistent customer base and repeat business.

Avis Budget Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 76.92%|
Next Earnings Date:Aug 04, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with significant achievements in fleet management and technology-driven efficiencies, countered by financial challenges such as revenue decline, adjusted EBITDA loss, and commercial demand pullback.
Q1-2025 Updates
Positive Updates
Record Vehicle Disposals
The company reported a record number of risk vehicle disposals, setting a company record for any quarter in its history.
Improved Vehicle Utilization
Vehicle utilization improved nearly four points year-over-year, reaching nearly 70% in the Americas.
Fleet Rotation Strategy Success
The accelerated fleet rotation strategy resulted in significant cost efficiencies and improved fleet age and mileage.
Positive Forward Bookings
Forward bookings are up year-over-year, indicating strong leisure demand.
Technology and Operational Efficiencies
The company is leveraging technology to improve revenue generation, operational efficiencies, and customer experience, enhancing margin contributions.
Negative Updates
Adjusted EBITDA Loss
The company reported an adjusted EBITDA loss of $93 million compared to a positive $12 million in Q1 2024.
Revenue Decline
Total company revenue decreased to $2.4 billion from $2.5 billion in the first quarter of 2024.
Pricing Challenges
Total company pricing was down 2% year-over-year on a constant currency basis.
Commercial Demand Pullback
There was a pullback in commercial demand, mitigated by improved leisure demand.
Non-Cash Charge Related to Fleet
A $390 million non-cash charge was recorded related to vehicle dispositions as part of the accelerated rotation strategy.
Company Guidance
In the first quarter of 2025, Avis Budget Group reported a quarterly revenue of $2.4 billion and an adjusted EBITDA loss of $93 million, reflecting a decline in revenue by 4% year-over-year, primarily due to a 3% decrease in pricing and a 1% decline in volume, exacerbated by calendar shifts. Despite these challenges, vehicle utilization improved by nearly four points compared to the first quarter of 2024, reaching almost 70% in the Americas. The company aggressively executed its fleet rotation strategy, disposing of a record number of risk vehicles and acquiring new model year 2025 vehicles, which contributed to better-than-expected fleet costs of $351 per unit per month against a forecast of $400. This strategic move, alongside strong leisure demand and technological investments, positions Avis Budget Group to exceed its adjusted EBITDA guidance for the first quarter and anticipate improvements in fleet costs to approximately $325 per unit per month in the second quarter, with further enhancements expected by the start of the fourth quarter.

Avis Budget Financial Statement Overview

Summary
Avis Budget's financial health presents a mixed picture. Revenue and operating cash flow show positive aspects, but negative net income and high leverage are significant concerns. Volatility in free cash flow and negative equity highlight financial risks, suggesting a need for improved profitability and balance sheet restructuring.
Income Statement
45
Neutral
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
30
Negative
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
60
Neutral
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue11.62B11.79B12.01B11.99B9.31B5.40B
Gross Profit4.71B5.78B4.77B10.76B7.80B3.72B
EBITDA1.04B1.74B5.66B7.15B4.74B2.17B
Net Income-2.21B-1.82B1.63B2.76B1.28B-684.00M
Balance Sheet
Total Assets9.83B29.04B32.57B25.93B22.60B17.54B
Cash, Cash Equivalents and Short-Term Investments516.00M534.00M555.00M570.00M534.00M692.00M
Total Debt8.53B26.04B26.45B20.92B17.80B13.66B
Total Liabilities11.87B31.36B32.91B26.63B22.81B17.69B
Stockholders Equity-2.82B-2.33B-349.00M-703.00M-220.00M-155.00M
Cash Flow
Free Cash Flow-2.41B-6.54B-11.63B576.00M-2.59B3.95B
Operating Cash Flow3.55B3.52B3.83B4.71B3.49B691.00M
Investing Cash Flow-1.27B-2.75B-7.35B-4.30B-6.31B3.18B
Financing Cash Flow-1.68B-781.00M3.51B-360.00M2.69B-4.04B

Avis Budget Technical Analysis

Technical Analysis Sentiment
Positive
Last Price177.80
Price Trends
50DMA
127.45
Positive
100DMA
101.02
Positive
200DMA
95.48
Positive
Market Momentum
MACD
16.85
Negative
RSI
74.75
Negative
STOCH
64.41
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 177.8 is above the 20-day moving average (MA) of 155.27, above the 50-day MA of 127.45, and above the 200-day MA of 95.48, indicating a bullish trend. The MACD of 16.85 indicates Negative momentum. The RSI at 74.75 is Negative, neither overbought nor oversold. The STOCH value of 64.41 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 (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$2.93B12.3322.80%1.63%7.31%91.99%
RR
69
Neutral
$7.04B14.8916.41%1.90%6.21%47.05%
68
Neutral
€2.70B19.207.73%2.90%-1.49%-31.61%
HRHRI
67
Neutral
$4.79B32.189.60%1.94%8.34%-63.02%
CACAR
59
Neutral
$6.39B8.2678.26%-2.78%-296.07%
56
Neutral
$3.47B38.0015.74%1.16%-3.52%-46.60%
HTHTZ
50
Neutral
$2.18B-244.63%-6.61%-1516.07%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CAR
Avis Budget
177.80
78.79
79.58%
HEES
H&E Equipment Services
94.64
51.42
118.97%
HRI
Herc Holdings
144.57
19.32
15.43%
MGRC
Mcgrath Rentcorp
119.77
15.38
14.73%
R
Ryder System
170.06
52.44
44.58%
HTZ
Hertz Global
7.13
3.71
108.48%

Avis Budget Corporate Events

Executive/Board Changes
Avis Budget Appoints Daniel Cunha as New CFO
Neutral
Jun 9, 2025

On June 9, 2025, Avis Budget Group announced the appointment of Daniel Cunha as Chief Financial Officer, effective July 1, 2025, succeeding Izzy Martins who will leave on June 30, 2025, to pursue other opportunities. Cunha, with a strong background in strategic financial leadership from his previous roles at Orion Services Group, Ocean Spray, and Heinz North America, will lead the company’s finance functions and contribute to its long-term strategic objectives. Martins will assist in the transition until August 31, 2025, after serving the company for over 20 years.

The most recent analyst rating on (CAR) stock is a Buy with a $140.00 price target. To see the full list of analyst forecasts on Avis Budget stock, see the CAR Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
Avis Budget Issues $736.5M Asset-Backed Securities
Positive
Jun 2, 2025

On May 28, 2025, Avis Budget‘s subsidiary, Avis Budget Rental Car Funding (AESOP) LLC, issued $736.5 million in asset-backed securities with maturities of three and five years. These securities are secured by vehicles in the company’s domestic fleet and other related assets, indicating a strategic move to leverage its existing assets for financial growth and stability.

The most recent analyst rating on (CAR) stock is a Buy with a $140.00 price target. To see the full list of analyst forecasts on Avis Budget stock, see the CAR Stock Forecast page.

Shareholder Meetings
Avis Budget Approves Key Governance Changes at Meeting
Neutral
May 19, 2025

On May 14, 2025, Avis Budget Group, Inc. held its 2025 Annual Meeting of Shareholders where several key proposals were voted on. The election of directors and the ratification of Deloitte & Touche LLP as auditors were approved. However, proposals to amend the charter to remove supermajority vote requirements and revise vote requirements for certain by-law amendments were not approved. Notably, the proposal to revise vote requirements for the removal of directors and allocate voting privileges over charter amendments affecting preferred stockholders were approved, indicating a shift in governance structure.

The most recent analyst rating on (CAR) stock is a Buy with a $155.00 price target. To see the full list of analyst forecasts on Avis Budget stock, see the CAR Stock Forecast page.

Private Placements and Financing
Avis Budget Issues $600M in Senior Notes
Neutral
May 19, 2025

On May 19, 2025, Avis Budget Car Rental, LLC and Avis Budget Finance, Inc., subsidiaries of Avis Budget Group, issued $600 million in 8.375% Senior Notes due 2032. The proceeds are intended for general corporate purposes, including debt repayment. The issuance aims to strengthen the company’s financial position and provide flexibility in managing its debt obligations.

The most recent analyst rating on (CAR) stock is a Buy with a $155.00 price target. To see the full list of analyst forecasts on Avis Budget stock, see the CAR Stock Forecast page.

Private Placements and FinancingShareholder Meetings
Avis Budget Amends Cooperation Agreement with SRS
Neutral
May 6, 2025

On April 30, 2025, Avis Budget Group’s subsidiary, Avis Budget Rental Car Funding (AESOP) LLC, completed an amendment and extension of its asset-backed variable-funding financing facilities, increasing the Series 2010-6 Notes facility to $3.042 billion and the Series 2015-3 Notes facility to $198 million. These amendments are expected to enhance the company’s financial flexibility in managing its car rental fleet in the U.S. Additionally, on May 6, 2025, Avis Budget Group amended its Cooperation Agreement with SRS Investment Management, LLC, altering the voting rights protocol for SRS’s excess shares at the 2025 annual stockholders meeting, which may influence future shareholder voting dynamics.

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: Jun 25, 2025