Avis Budget (CAR) AI Stock Analysis

• Market Cap: $5.48B
• Dividend Yield: N/A
• Average Volume (3M): 1.14M
• Price to Earnings (P/E): 8.3
• Beta (1Y): 1.52
• Revenue Growth: -2.25%
• EPS Growth: -395.93%
• Country: US
• Employees: 17,000
• Sector: Industrials
• Sector Strength: 75
• Industry: Rental & Leasing Services
• EPS (TTM): 2.70
• Shares Outstanding: 35,193,504
• 10 Day Avg. Volume: 1,000,722
• 30 Day Avg. Volume: 1,136,899
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 6.33
• Enterprise Value/Revenue: 2.99
• Enterprise Value/Gross Profit: 6.42
• Enterprise Value/Ebitda: 32.18
• 1Y Price Target: $140.86
• Price Target Upside: -11.27% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 46 Neutral
• Price Target: $155.00 ▼(-2.37% Downside)

Avis Budget's overall stock score is primarily impacted by its financial performance challenges, including high leverage and negative equity. Technical analysis also indicates bearish momentum. While strategic initiatives and corporate events show potential for future growth, current valuation metrics and operational challenges weigh heavily on the stock's attractiveness.

Positive Factors

Debt Reduction

CAR is focused on reducing leverage, and it is expected to pay down ~$500mm of debt by year-end.

Growth Opportunities

The 'Avis First' initiative and partnership with Waymo are seen as potential growth opportunities.

Technology Adoption

Avis brings decades of fleet management expertise, a track record of fast, efficient execution, and a commitment to adopting cutting-edge technology, which will help scale the Waymo Driver even faster.

Negative Factors

Supply Issues

Supply issues are putting a dampener on gains from vehicle sales.

Valuation

The stock is trading at a multiple significantly higher than its historical average.

Volatility

As investors grapple with Avis' transition from rental operator to autonomous megafleet manager, further volatility in stock price is expected.

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 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 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

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.61B	11.62B	12.01B	11.99B	9.31B	5.40B
Gross Profit	5.41B	3.00B	4.77B	10.76B	7.80B	3.72B
EBITDA	1.08B	2.67B	5.66B	7.15B	4.74B	2.17B
Net Income	-2.22B	-1.82B	1.63B	2.76B	1.28B	-684.00M
Balance Sheet
Total Assets	10.16B	29.04B	32.57B	25.93B	22.60B	17.54B
Cash, Cash Equivalents and Short-Term Investments	541.00M	534.00M	555.00M	570.00M	534.00M	692.00M
Total Debt	8.71B	26.04B	26.45B	20.92B	17.80B	13.66B
Total Liabilities	12.39B	31.36B	32.91B	26.63B	22.81B	17.69B
Stockholders Equity	-2.75B	-2.33B	-349.00M	-703.00M	-220.00M	-155.00M
Cash Flow
Free Cash Flow	-8.41B	-6.54B	-11.63B	576.00M	-2.59B	3.95B
Operating Cash Flow	3.50B	3.52B	3.83B	4.71B	3.49B	691.00M
Investing Cash Flow	-4.15B	-2.75B	-7.35B	-4.30B	-6.31B	3.18B
Financing Cash Flow	654.00M	-781.00M	3.51B	-360.00M	2.69B	-4.04B

Avis Budget Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 158.76
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• 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 Neutral. The current price of 158.76 is below the 20-day moving average (MA) of 173.60, below the 50-day MA of 167.30, and above the 200-day MA of 108.74, indicating a neutral trend. The MACD of -5.19 indicates Positive momentum. The RSI at 41.34 is Neutral, neither overbought nor oversold. The STOCH value of 46.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CAR.

Avis Budget Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MGRC	82 Outperform	$2.94B	11.64	23.85%	1.61%	8.78%	117.40%
R	78 Outperform	$7.34B	15.37	16.38%	1.86%	3.68%	6.61%
HRI	67 Neutral	$4.15B	144.62	1.41%	2.19%	11.41%	-92.67%
Sector *	66 Neutral	£2.67B	12.98	3.30%	3.24%	2.40%	-23.01%
HEES	56 Neutral	$3.47B	38.00	15.74%	1.16%	-3.52%	-46.60%
HTZ	47 Neutral	$1.59B	―	-350.48%	―	-7.58%	-225.06%
CAR	46 Neutral	$5.48B	8.26	78.26%	―	-2.25%	-395.93%

Avis Budget Corporate Events

Avis Budget Amends Certificate of Incorporation

On May 14, 2025, Avis Budget Group, Inc. held its Annual Meeting of Shareholders, where stockholders approved amendments to the company’s Certificate of Incorporation. These changes, filed on July 31, 2025, include revising director removal vote requirements, allocating voting privileges for preferred stock amendments, and providing for officer exculpation, potentially impacting governance and shareholder rights.

Avis Budget Refinances Loans with JPMorgan Chase

On July 16, 2025, Avis Budget Group, Inc. and its subsidiaries refinanced their existing tranche B term loans with new repriced loans under a Tenth Amendment to their credit agreement with JPMorgan Chase Bank. The new loans, amounting to $1,148,846,850, will mature in 2032 and offer a choice of interest rates. This refinancing is part of Avis Budget’s financial strategy to manage its debt obligations effectively.

Avis Budget Appoints Daniel Cunha as New CFO

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.

Avis Budget Issues $736.5M Asset-Backed Securities

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.

Avis Budget Approves Key Governance Changes at Meeting

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.

Avis Budget Issues $600M in Senior Notes

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.