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The Car Rental Giant that Can Drive Your Portfolio Higher

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The Avis Budget Group (CAR - Free Report) operates car and truck rental operations in 70 countries around the globe, primarily under two popular brands.  Avis is the higher end option, providing newer luxury cars, while Budget specializes in lower cost economy vehicles.  

Two Strong Brands


The combination of Avis and Budget mean that the company rents across the entire spectrum of potential customers, while sharing a single rental fleet and administrative infrastructure.  They maintain the highest share of airport rental revenue in the industry and are the second largest provider of consumer truck rentals.  Avis Budget has handily outperformed close industry competitor Herc Holdings (HRI - Free Report) , operator of the Hertz rental car line.


Even with its position as the sales leader, revenues are growing steadily.



Avis also acquired Zipcar in 2013 with the goal of leveraging their vast infrastructure in operating the popular and growing car-sharing service as a wholly owned subsidiary.


Strong global economic growth means high demand for car rentals both for business and personal vacation use, and Avis is well positioned to capitalize on the boom in business across multiple segments of the market.


With three earnings estimate upgrades in the past 60 days, Avis Budget Group earns a Zacks Rank #1 (Strong Buy) and a VGM score of “A”.
“VGM” is a combined rating of value, Growth and Momentum.



Thanks to rising earnings estimates, Avis Budget group trades at a forward P/E ratio of 15.1, lower than the business services industry average of 21.7, a great value compared to its peers.  The company earned $2.85/share in 2017, but estimates for 2018 have been steadily revised upward and the Zacks Consensus Estimate for 2018 currently stands at $3.29/share - a year over year increase of 15%.

Earnings Beat


Avis Budget blew away their last earnings estimate, reporting a net profit of $0.45 in Q4 2107 when the Consensus Estimate was just $0.19.
Investors have taken notice and the stock price has performed strongly of late, coming sharply off a 52 week low of $20.71 last summer, Avis Budget has steadily climbed higher, closing at $49.60 on Monday.  


Strong investor interest and consistent institutional buying help the stock earn its momentum score of “A”.


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Avis Budget Group, Inc. (CAR) - free report >>

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