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Avis Budget Group, Inc.(CAR - Free Report) recently entered into a definitive purchase agreement with I.D. Systems, Inc. (IDSY - Free Report) . Per the agreement, I.D. Systems’ proprietary wireless rental fleet management systems will be used in Avis Budget’s vehicle rental fleet. The financial details of the agreement remain under wraps.

Headquartered in Woodcliff Lake, N.J., I.D. Systems is a leading global provider of wireless solutions for securing, controlling, tracking, and managing high-value enterprise assets. The company has its operations across Texas, Germany, and the U.K. It works on addressing the needs of organizations to help them monitor and analyze their assets to increase efficiency and productivity, in turn reducing costs and improving profitability.

This deal will help Avis Budget enhance its operations. I.D. Systems’ wireless in-vehicle management system permits two-way data communications between a vehicle and various car rental operating systems. This, when combined with Avis Budget’s existing system, will help the company rent and check-in vehicles virtually, all on a mobile device. The collaboration will help it significantly streamline and automate the vehicle data collection and billing process.

In the first phase of the new purchase agreement, I.D. Systems’ technology will be incorporated into 50,000 Avis Budget vehicles. As part of the deal, I.D. Systems received an upfront payment, which it will allocate toward developing additional system enhancements along with ramping production to deliver more than 2,500 units per week beginning fourth-quarter 2017.

Avis Budget underperformed the Zacks categorized Business - Services industry with an average loss of 14.2% compared with a decline of 7.4% for the latter, over a period of 90 days. Despite its underperformance, the company continues to make inorganic investments to help it enhance its performance in the near future.

Avis Budget provides vehicle rental services through a network of approximately 10,000 car and truck rental locations in the U.S., Canada, Australia, New Zealand, Latin America, the Caribbean and parts of Asia. The company was founded in 1946 under the name Cendant Corp., which was later changed to Avis Budget Group in 2006, after a spinoff. The New Jersey-based company offers car rental services to the commercial and leisure segments of the travel industry under the Avis brand, as well as to the price-conscious car rental segment under the Budget brand. Avis Budget also offers truck rentals and related services to consumers and light commercial users under the Budget truck brand.

Avis Budget carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the industry include Hitachi, Ltd. (HTHIY - Free Report) and Barloworld Limited (BRRAY - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Hitachi has a long-term earnings growth expectation of 13% and is currently trading at a forward P/E of 13.6x.

Barloworld has a long-term earnings growth expectation of 18.7% and is currently trading at a forward P/E of 13.2x.

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