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Avis Budget (CAR) Down 22.7% Since Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Avis Budget Group, Inc. (CAR - Free Report) . Shares have lost about 22.7% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Avis Reports Wider Q1 Loss, Provides '17 Guidance
Avis Budget reported first-quarter 2017 results wherein adjusted loss per share was $0.94 compared with a loss of $0.28 in the prior-year quarter. Adjusted loss was also wider than the Zacks Consensus Estimate of a loss of $0.51. GAAP loss for the quarter was $1.25 cents per share compared with loss of $0.53 in the prior-year quarter, due to decline in revenues.
Revenues for the quarter were $1,839 million compared with $1,881 million in the year-ago quarter. Revenues missed the Zacks Consensus Estimate of $1,854 million. Revenues declined primarily due to higher-than-expected fleet costs and continued pricing pressures.
Adjusted loss before interest, tax, depreciation and amortization was $27 million against adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of $44 million in the year-ago quarter, driven by lower pricing and higher per-unit fleet costs in the Americas segment.
Segmental Performance
Americas reported revenues of $1,314 million compared with $1,364 in the prior-year quarter, primarily due to a 1% increase in rental days, offset by a 4% fall in pricing. Per-unit fleet costs increased 7% to $333 per month.
The International segment’s revenues were up 2% year over year to $525 million, due to the acquisition of France Cars, partially offset by a 6% decrease in pricing, including a 2% negative impact from currency movements.
Financials
Avis ended the quarter with cash and cash equivalents of $923 million. As of Mar 31, 2017, the company’s shareholders’ equity was $221 million. During the year, the company generated $447 million as cash flow from operating activities. Avis repurchased 1.5 million shares worth $50 million.
Guidance
Full-year 2017 revenues are expected to be in the range of $8.8-$8.95 billion. Movements in currency exchange rates are currently expected to hurt revenue growth by approximately $75 million. Per-unit fleet costs are expected to be in the range of $285-$295 per month in 2017 compared with $285 in 2016. In the Americas segment, per-unit fleet costs are expected to be between $317 and $327. In the International segment, per-unit fleet costs are expected to be between $214 and $224 per month.Adjusted EBITDA is expected to be in the range of $800-$880 million. For 2017, adjusted earnings per share are expected to be between $2.85 and $3.50. The company expects to repurchase $300 million or more stocks in 2017.
How Have Estimates Been Moving Since Then?
It turns out fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower. In the past month, the consensus estimate has shifted lower by 11.1% due to these changes.
At this time, Avis Budget's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with a 'D'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
The stock has a Zacks Rank #5 (Strong Sell). We expect below average returns from the stock in the next few months.
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Avis Budget (CAR) Down 22.7% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Avis Budget Group, Inc. (CAR - Free Report) . Shares have lost about 22.7% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Avis Reports Wider Q1 Loss, Provides '17 Guidance
Avis Budget reported first-quarter 2017 results wherein adjusted loss per share was $0.94 compared with a loss of $0.28 in the prior-year quarter. Adjusted loss was also wider than the Zacks Consensus Estimate of a loss of $0.51. GAAP loss for the quarter was $1.25 cents per share compared with loss of $0.53 in the prior-year quarter, due to decline in revenues.
Revenues for the quarter were $1,839 million compared with $1,881 million in the year-ago quarter. Revenues missed the Zacks Consensus Estimate of $1,854 million. Revenues declined primarily due to higher-than-expected fleet costs and continued pricing pressures.
Adjusted loss before interest, tax, depreciation and amortization was $27 million against adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of $44 million in the year-ago quarter, driven by lower pricing and higher per-unit fleet costs in the Americas segment.
Segmental Performance
Americas reported revenues of $1,314 million compared with $1,364 in the prior-year quarter, primarily due to a 1% increase in rental days, offset by a 4% fall in pricing. Per-unit fleet costs increased 7% to $333 per month.
The International segment’s revenues were up 2% year over year to $525 million, due to the acquisition of France Cars, partially offset by a 6% decrease in pricing, including a 2% negative impact from currency movements.
Financials
Avis ended the quarter with cash and cash equivalents of $923 million. As of Mar 31, 2017, the company’s shareholders’ equity was $221 million. During the year, the company generated $447 million as cash flow from operating activities. Avis repurchased 1.5 million shares worth $50 million.
Guidance
Full-year 2017 revenues are expected to be in the range of $8.8-$8.95 billion. Movements in currency exchange rates are currently expected to hurt revenue growth by approximately $75 million. Per-unit fleet costs are expected to be in the range of $285-$295 per month in 2017 compared with $285 in 2016. In the Americas segment, per-unit fleet costs are expected to be between $317 and $327. In the International segment, per-unit fleet costs are expected to be between $214 and $224 per month.Adjusted EBITDA is expected to be in the range of $800-$880 million. For 2017, adjusted earnings per share are expected to be between $2.85 and $3.50. The company expects to repurchase $300 million or more stocks in 2017.
How Have Estimates Been Moving Since Then?
It turns out fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower. In the past month, the consensus estimate has shifted lower by 11.1% due to these changes.
Avis Budget Group, Inc. Price and Consensus
Avis Budget Group, Inc. Price and Consensus | Avis Budget Group, Inc. Quote
VGM Scores
At this time, Avis Budget's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with a 'D'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
The stock has a Zacks Rank #5 (Strong Sell). We expect below average returns from the stock in the next few months.