Avis Budget (CAR) AI Stock Analysis

• Market Cap: $3.83B
• Dividend Yield: N/A
• Average Volume (3M): 1.70M
• Price to Earnings (P/E): 8.3
• Beta (1Y): 1.31
• Revenue Growth: -2.78%
• EPS Growth: -296.07%
• Country: US
• Employees: 17,000
• Sector: Industrials
• Sector Strength: 91
• Industry: Rental & Leasing Services
• EPS (TTM): -2.11
• Shares Outstanding: 35,192,238
• 10 Day Avg. Volume: 1,485,663
• 30 Day Avg. Volume: 1,701,026
• PEG Ratio: 0.08
• Price to Book (P/B): -1.37
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -1.59
• Enterprise Value/Market Cap: 3.09
• Enterprise Value/Revenue: 0.25
• Enterprise Value/Gross Profit: 2.52
• Enterprise Value/Ebitda: 0.79
• 1Y Price Target: $116.50
• Price Target Upside: 7.04% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

Avis Budget Group's overall stock score reflects a challenging financial environment marked by negative net income and high leverage. While technical indicators suggest strong market interest, the valuation remains unattractive due to negative earnings. Earnings call insights show operational efficiencies but highlight financial difficulties that need addressing.

Positive Factors

Demand Trends

CAR is seeing encouraging demand signals, with advanced reservations continuing to trend positively.

Financial Performance

Strong EBITDA and free cash flow are expected to allow for the allocation of capital toward shareholder-friendly initiatives.

Market Position

CAR could gain market share from competitors as it undergoes a major fleet refresh.

Negative Factors

Cost Challenges

The decision to accelerate fleet rotation resulted in a much larger impairment charge than investors had expected.

Financial Challenges

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.

Market Conditions

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

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 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 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. 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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
11.62B	11.79B	12.01B	11.99B	9.31B	5.40B
	Gross Profit
4.71B	5.78B	4.77B	10.76B	7.80B	3.72B
	EBIT
1.67B	269.00M	3.19B	3.91B	2.13B	-529.00M
	EBITDA
1.04B	1.74B	5.66B	7.15B	4.74B	2.17B
	Net Income Common Stockholders
-2.21B	-1.82B	1.63B	2.76B	1.28B	-684.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
516.00M	534.00M	555.00M	570.00M	534.00M	692.00M
	Total Assets
9.83B	29.04B	32.57B	25.93B	22.60B	17.54B
	Total Debt
8.53B	26.04B	26.45B	20.92B	17.80B	13.66B
	Net Debt
8.01B	25.51B	25.90B	20.35B	17.27B	12.97B
	Total Liabilities
11.87B	31.36B	32.91B	26.63B	22.81B	17.69B
	Stockholders Equity
-2.82B	-2.33B	-349.00M	-703.00M	-220.00M	-155.00M
Cash Flow		Free Cash Flow
-2.41B	-6.54B	-11.63B	576.00M	-2.59B	3.95B
	Operating Cash Flow
3.55B	3.52B	3.83B	4.71B	3.49B	691.00M
	Investing Cash Flow
-1.27B	-2.75B	-7.35B	-4.30B	-6.31B	3.18B
	Financing Cash Flow
-1.68B	-781.00M	3.51B	-360.00M	2.69B	-4.04B

Avis Budget Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 108.84
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 108.84 is above the 20-day moving average (MA) of 96.75, above the 50-day MA of 79.34, and above the 200-day MA of 85.58, indicating a bullish trend. The MACD of 7.78 indicates Negative momentum. The RSI at 76.70 is Negative, neither overbought nor oversold. The STOCH value of 85.97 is Negative, 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
MGRC	79 Outperform	$2.85B	12.00	22.80%	1.65%	7.31%	91.99%
R	69 Neutral	$6.55B	13.85	16.41%	1.98%	6.21%	47.05%
HRI	68 Neutral	$3.91B	30.61	9.60%	1.96%	8.34%	-63.02%
Sector *	64 Neutral	$4.43B	12.01	5.16%	249.23%	4.03%	-11.73%
HEES	56 Neutral	$3.53B	38.66	15.74%	1.14%	-3.52%	-46.60%
CAR	56 Neutral	$3.83B	8.26	78.26%	―	-2.78%	-296.07%
HTZ	47 Neutral	$2.06B	―	-244.63%	―	-6.61%	-1516.07%

Avis Budget Corporate Events

Avis Budget Amends Cooperation Agreement with SRS

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.

Spark’s Take on CAR Stock

According to Spark, TipRanks’ AI Analyst, CAR is a Neutral.

Avis Budget’s overall stock score reflects a challenging financial situation with high leverage and negative equity. While technical indicators suggest short-term momentum, the lack of profitability and concerning valuation metrics weigh heavily. The company must address financial instability and capitalize on its strategic initiatives to improve its outlook.

To see Spark’s full report on CAR stock, click here.