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Avis Budget (CAR) Earnings to Reflect Volume Growth in Q2

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Shares of Avis Budget Group, Inc. (CAR - Free Report) have gained 11.2% in a year’s time, outperforming the 4.3% rally of the industry it belongs to. The company is slated to report second-quarter 2018 results on Aug 7, after the bell.

 

Let’s see how things are shaping up for the announcement.

Revenues Likely to be Driven by Volume Growth

The Zacks Consensus Estimate for second-quarter revenues is pegged at $2.39 billion, reflecting 6.7% growth when compared with the year-ago quarter’s actual figure. The expected improvement is likely to be driven by higher leisure volumes at the Americas segment and increased commercial volume at the International segment. EMEA and Asia Pacific regions are expected to witness strong growth. In the first quarter, total revenues improved 7% year over year to $2 billion.

Avis Budget Group, Inc. Revenue (TTM)

 

Positive Seasonality Effect on Earnings

The Zacks Consensus Estimate for second-quarter earnings stands at 55 cents, indicating year-over-year growth of 83.3%. The bottom line will see positive seasonality effect as demand remains high in the spring and summer vacation across majority of the countries in which Avis Budget operates. Operational efficiency and fleet cost optimization are also likely to boost the bottom-line performance. In the first quarter, the company’s adjusted loss declined 27% on a year-over-year basis.

Our Model Does Not Suggest a Beat

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Avis Budget has an Earnings ESP of -6.42% and a Zacks Rank #3, a combination that decreases the chances of an earnings beat.

Key Picks

Here are some stocks from the broader Business Services sector that investors may consider as our model shows that these have the right combination of elements to post an earnings beat in second-quarter 2018:

Cardlytics (CDLX - Free Report) has an Earnings ESP of +26.12% and a Zacks Rank of 3. The company is slated to report results, after the bell on Aug 14. You can see the complete list of today’s Zacks #1 Rank stocks here.

Switch has an Earnings ESP of +9.38% and a Zacks Rank #3. The company will report results on Aug 13, after market close.

Worldpay is also a Zacks Rank #3 stock with an Earnings ESP of +0.49%. The company is slated to report results on Aug 9, before market open.

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