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Can Avis Budget's (CAR) Q2 Earnings Break its Dismal Trend?
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Avis Budget Group, Inc. (CAR - Free Report) is slated to release second-quarter 2016 results on Aug 2, after the closing bell. Last quarter, the company had recorded a loss, marking a sharp negative surprise of 154.6%. In fact, the bottom line has underperformed the Zacks Consensus Estimate by an average of 32.9% over the trailing four quarters. Let’s see how things are shaping up for this announcement.
Avis Budget continues to face hurdles like unfavorable pricing and high fleet costs, which have been weighing upon its results and remain threats to its ongoing performance. Evidently, fleet costs are expected to rise in 2016, thus posing a threat to EBITDA. Also, the company’s significant presence in the international market exposes it to foreign currency headwinds. However, these fluctuations are anticipated to have a lesser impact on Avis Budget’s 2016 results now than before, as well reflected in its sales and earnings outlook for the year. Moreover, the company’s enhanced sales guidance range and reiterated earnings view amid all the aforementioned challenges provide some respite to investors. Hence, it is best to wait and see what’s in store for Avis Budget this earnings season.
Earnings Whispers
Our proven model does not conclusively show that Avis Budget is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: Earnings ESP for Avis Budget is currently pegged at 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 72 cents.
Zacks Rank: Avis Budget’s Zacks Rank #2 (Buy) increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Jack in the Box Inc. (JACK - Free Report) , expected to report earnings on Aug 3, currently has an Earnings ESP of +1.15% and a Zacks Rank #2.
Hibbett Sports, Inc. (HIBB - Free Report) , expected to report earnings on Aug 19, currently has an Earnings ESP of +3.70% and a Zacks Rank #3 (Hold).
The Gap Inc. (GPS - Free Report) , expected to report earnings on Aug 18, currently has an Earnings ESP of +2.13% and a Zacks Rank #3.
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Can Avis Budget's (CAR) Q2 Earnings Break its Dismal Trend?
Avis Budget Group, Inc. (CAR - Free Report) is slated to release second-quarter 2016 results on Aug 2, after the closing bell. Last quarter, the company had recorded a loss, marking a sharp negative surprise of 154.6%. In fact, the bottom line has underperformed the Zacks Consensus Estimate by an average of 32.9% over the trailing four quarters. Let’s see how things are shaping up for this announcement.
AVIS BUDGET GRP Price and EPS Surprise
AVIS BUDGET GRP Price and EPS Surprise | AVIS BUDGET GRP Quote
Factors Influencing this Quarter
Avis Budget continues to face hurdles like unfavorable pricing and high fleet costs, which have been weighing upon its results and remain threats to its ongoing performance. Evidently, fleet costs are expected to rise in 2016, thus posing a threat to EBITDA. Also, the company’s significant presence in the international market exposes it to foreign currency headwinds. However, these fluctuations are anticipated to have a lesser impact on Avis Budget’s 2016 results now than before, as well reflected in its sales and earnings outlook for the year. Moreover, the company’s enhanced sales guidance range and reiterated earnings view amid all the aforementioned challenges provide some respite to investors. Hence, it is best to wait and see what’s in store for Avis Budget this earnings season.
Earnings Whispers
Our proven model does not conclusively show that Avis Budget is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: Earnings ESP for Avis Budget is currently pegged at 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 72 cents.
Zacks Rank: Avis Budget’s Zacks Rank #2 (Buy) increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Jack in the Box Inc. (JACK - Free Report) , expected to report earnings on Aug 3, currently has an Earnings ESP of +1.15% and a Zacks Rank #2.
Hibbett Sports, Inc. (HIBB - Free Report) , expected to report earnings on Aug 19, currently has an Earnings ESP of +3.70% and a Zacks Rank #3 (Hold).
The Gap Inc. (GPS - Free Report) , expected to report earnings on Aug 18, currently has an Earnings ESP of +2.13% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>