It has been about a month since the last earnings report for Avis Budget Group (CAR Quick QuoteCAR - Free Report) . Shares have lost about 12.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Avis Budget due for a breakout? Before we dive into how investors and analysts have reacted as 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 Budget Surpasses Q4 Earnings Estimates

Avis Budget Group, Inc. reported mixed fourth-quarter 2023 results wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.

Adjusted earnings of $7.1 per share beat the consensus estimate by 62.8% but plunged 32.1% year over year. Total revenues of $2.76 billion missed the consensus estimate by 1.3% and decreased slightly from the year ago reported figure.

Segmental Revenues

The Americas segment’s revenues of $2.17 billion decreased 1.8% year over year. The figure missed our estimate of $2.78 billion.

The International segment’s revenues of $597 million beat our estimate by 8.3% and increased 5.3% year over year.

Profitability

Adjusted EBITDA was $311 million, down 53% year over year. Adjusted EBITDA margin was 11.25% compared with 23.75% in the year-ago quarter. 

Adjusted EBITDA for the Americas segment was $309 million, down 50% year over year. Internationally, adjusted EBITDA was $28 million, 56% lower than the year-ago figure.

Balance Sheet and Cash Flow

Avis Budget exited fourth-quarter 2023 with cash and cash equivalents of $555 million compared with $572 million at the end of the previous quarter. Corporate debt was $4.82 billion compared with $4.67 billion at the end of the previous quarter.

CAR generated $793 million in net cash from operating activities in the reported quarter. Adjusted free cash flow was $579 million while capital expenditures were $93 million in the reported quarter. The company repurchased 1.4 million shares for $257 million during the quarter. The company returned $355 million as dividends for the first time since the company’s inception.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -351.32% due to these changes.

VGM Scores

At this time, Avis Budget has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Avis Budget has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Avis Budget belongs to the Zacks Transportation - Services industry. Another stock from the same industry, C.H. Robinson Worldwide (CHRW Quick QuoteCHRW - Free Report) , has gained 2.2% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.

C.H. Robinson reported revenues of $4.22 billion in the last reported quarter, representing a year-over-year change of -16.7%. EPS of $0.50 for the same period compares with $1.03 a year ago.

C.H. Robinson is expected to post earnings of $0.65 per share for the current quarter, representing a year-over-year change of -33.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -7.8%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #5 (Strong Sell) for C.H. Robinson. Also, the stock has a VGM Score of B.