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Avis Budget Group (CAR - Free Report) is a Zacks Rank #1 (Strong Buy) that provides car and truck rentals, car sharing, and ancillary products and services to businesses and consumers. The company is a leading global provider of mobility solutions through its three most recognized brands — Avis, Budget and Zipcar.
Late in 2021, CAR was the focus of a big short squeeze that came after a big earnings beat. But the stock came all the way back to the pre-earnings levels after just a few months.
Investors are now getting bullish after another recent earnings beat. Moreover, estimates for the upcoming quarters are ticking higher, which is helping investors gain renewed interest in the stock.
About the Company
Formerly known Cendant Corporation, Avis Budget was founded in 1946 and is headquartered in Parsippany, new Jersey. It employs 16,000 people and has a market cap of almost $8.5 Billion.
Avis Budget Group, Inc. operates in approximately 10,400 locations worldwide.The company has licensees in approximately 175 countries throughout the world.
CAR has a Zacks Style Score of “A” in Value, “A” in Growth and “B” in Momentum. The stock is very attractive to value investors as it had a Forward PE under 4.
Q2 Earnings Beat
Avis Budget reported EPS earlier this month, posting a 30% EPS beat. For Q2, CAR reported $15.94 v the $12.22 expected. Revenues came in at $3.2B v the $3.08B expected. Adjusted EBITDA was $1.21B, up from 0.62B last year.
Americas revenue was up 30% year over year, while international revenue was up 71% y/y.
CEO Joe Ferro had the following comments on the quarter:
“Through enhanced revenue generation, diligent fleet management and stringent cost control, we generated another record quarter for the Company, highlighted by the Americas reporting over one billion of Adjusted EBITDA for the first time in a quarter and International achieving their highest second quarter Adjusted EBITDA ever.”
The beat was the companies eighth straight. This winning streak has helped the stock start its run from $50, to where it is now near $200 a share.
Analyst Estimates
Looking at estimates, the numbers are going up across all time frames.
For the current quarter, estimates have gone up 24% over last 30 days, from $12.14 to $15.05. For the next quarter, estimates have gone from $5.70 to $6.28, or 10%.
Looking down the road, analysts expect the momentum to continue. Over the last 30 days, next year’s numbers have gone up 24% from $18.34 to $22.67.
After earnings, JPMorgan Chase reiterated CAR with a Neutral, but took their price target up to $230 from $214.
The Technicals
When the stock took off to $500 in late 2021, the shorts were in panic mode. There was nothing on the chart that indicated price should have gone that high, but the market structure, combined with a heavy short squeeze, forced price to unrealistic levels.
After the pullback, the stock consolidated under the $200 level as the year started. From there, round two of the short squeeze brought he stock back to the $300 area. But once again the stock came back under $200 as the market weakened.
With fewer momentum players in the name, the stock is starting to trade in a more rational manner.
Earnings got things going and the stock managed to get back to that $200 level. There has been some back and forth, but recently the 50-day moving average was defended at $166.
From there, price has gravitated upwards and the stock is back above the 21-day MA. This is great news for the bulls, who will now look for the 200-day MA at $210.
Longer term, look for the stock to work its way to the $245 level if that 200-day can be taken back by the bulls.
Bottom Line
Avis Budget has been lumped into the “Meme stock “crowd after the big squeeze last year. However, the big difference with CAR is that the company is beating earnings and estimate are going higher. This stock is not Bed Bath and Beyond (BBBY), AMC Entertainment (AMC) and GameStop (GME). Investors should ignore those names and be getting bullish CAR into the back half of the year.
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Bull of the Day: Avis Budget Group (CAR)
Avis Budget Group (CAR - Free Report) is a Zacks Rank #1 (Strong Buy) that provides car and truck rentals, car sharing, and ancillary products and services to businesses and consumers. The company is a leading global provider of mobility solutions through its three most recognized brands — Avis, Budget and Zipcar.
Late in 2021, CAR was the focus of a big short squeeze that came after a big earnings beat. But the stock came all the way back to the pre-earnings levels after just a few months.
Investors are now getting bullish after another recent earnings beat. Moreover, estimates for the upcoming quarters are ticking higher, which is helping investors gain renewed interest in the stock.
About the Company
Formerly known Cendant Corporation, Avis Budget was founded in 1946 and is headquartered in Parsippany, new Jersey. It employs 16,000 people and has a market cap of almost $8.5 Billion.
Avis Budget Group, Inc. operates in approximately 10,400 locations worldwide.The company has licensees in approximately 175 countries throughout the world.
CAR has a Zacks Style Score of “A” in Value, “A” in Growth and “B” in Momentum. The stock is very attractive to value investors as it had a Forward PE under 4.
Q2 Earnings Beat
Avis Budget reported EPS earlier this month, posting a 30% EPS beat. For Q2, CAR reported $15.94 v the $12.22 expected. Revenues came in at $3.2B v the $3.08B expected. Adjusted EBITDA was $1.21B, up from 0.62B last year.
Americas revenue was up 30% year over year, while international revenue was up 71% y/y.
CEO Joe Ferro had the following comments on the quarter:
“Through enhanced revenue generation, diligent fleet management and stringent cost control, we generated another record quarter for the Company, highlighted by the Americas reporting over one billion of Adjusted EBITDA for the first time in a quarter and International achieving their highest second quarter Adjusted EBITDA ever.”
The beat was the companies eighth straight. This winning streak has helped the stock start its run from $50, to where it is now near $200 a share.
Analyst Estimates
Looking at estimates, the numbers are going up across all time frames.
For the current quarter, estimates have gone up 24% over last 30 days, from $12.14 to $15.05. For the next quarter, estimates have gone from $5.70 to $6.28, or 10%.
Looking down the road, analysts expect the momentum to continue. Over the last 30 days, next year’s numbers have gone up 24% from $18.34 to $22.67.
After earnings, JPMorgan Chase reiterated CAR with a Neutral, but took their price target up to $230 from $214.
The Technicals
When the stock took off to $500 in late 2021, the shorts were in panic mode. There was nothing on the chart that indicated price should have gone that high, but the market structure, combined with a heavy short squeeze, forced price to unrealistic levels.
After the pullback, the stock consolidated under the $200 level as the year started. From there, round two of the short squeeze brought he stock back to the $300 area. But once again the stock came back under $200 as the market weakened.
With fewer momentum players in the name, the stock is starting to trade in a more rational manner.
Earnings got things going and the stock managed to get back to that $200 level. There has been some back and forth, but recently the 50-day moving average was defended at $166.
From there, price has gravitated upwards and the stock is back above the 21-day MA. This is great news for the bulls, who will now look for the 200-day MA at $210.
Longer term, look for the stock to work its way to the $245 level if that 200-day can be taken back by the bulls.
Bottom Line
Avis Budget has been lumped into the “Meme stock “crowd after the big squeeze last year. However, the big difference with CAR is that the company is beating earnings and estimate are going higher. This stock is not Bed Bath and Beyond (BBBY), AMC Entertainment (AMC) and GameStop (GME). Investors should ignore those names and be getting bullish CAR into the back half of the year.