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Reasons Why You Should Retain Avis Budget Stock in Your Portfolio
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Key Takeaways
CAR's stock gained 27.1% over the past month, outperforming the industry's 23.8% growth.
CAR's Q1 2026 revenues from the Americas increased for the first time in 10 quarters.
CAR achieved its highest first-quarter fleet utilization rate in more than 15 years during Q1 2026.
Shares of Avis Budget Group, Inc. (CAR - Free Report) have had an excellent run over the past month. The stock has risen 27.1% compared with the industry's 23.8% growth. The Zacks S&P 500 composite fell 0.3% during the said time frame.
One-Month Share Price Performance
Image Source: Zacks Investment Research
CAR has a Growth Score of B, which condenses key financial metrics to reflect a fair sense of the quality and sustainability of its growth.
The company’s second-quarter 2026 earnings are expected to increase 2,040% year over year. Earnings for 2026 and 2027 are projected to rise 127.8% and 167.6%, respectively, year over year. Revenues are expected to increase 2.4% in 2026 and 1.7% in 2027.
Factors That Bode Well for CAR
CAR’s revenue growth is primarily driven by its vehicle rental operations. It enjoys a large share of airport car rental revenues in North America, Europe and Australasia. Revenues in the Americas rose 2.9% year over year in the first quarter of 2026, delivering its first revenue increase in 10 quarters. This growth is supported primarily by stronger pricing rather than volume growth. The company’s revenue per day increased 2.8% year over year during the same time frame, representing the first quarter of positive pricing growth since late 2022.
The company has enhanced its fleet management strategy, cost control and operational efficiency to meet customers' demands. Transportation Security Administration (TSA) passenger volumes increased 1.6% in the last reported quarter. However, the company intentionally reduced its fleet size by 0.6%. This tighter alignment between supply and demand helped improve utilization and strengthen pricing. CAR accelerated vehicle dispositions, selling a record number of used cars in the Americas. Management also prioritized fleet normalization over maximizing individual vehicle sale prices, helping reduce depreciation costs more quickly while providing operational flexibility and potentially lowering maintenance costs going forward.
CAR focuses on the efficient execution of its operations. In the first quarter of 2026, the company reported its highest first-quarter fleet utilization rate in more than 15 years, despite navigating ongoing vehicle recalls, severe weather disruptions and broader geopolitical uncertainty. This higher utilization demonstrates the company's ability to generate more revenues from a smaller fleet while enhancing profitability.
CAR consistently returns value to shareholders through robust share repurchase programs. The company bought back shares worth $3.33 billion, $951 million, $70 million and $7 million in 2022, 2023, 2024 and 2025, respectively. Such moves instill shareholder confidence in its stock and generate growth.
Risks to Watch
Recent geopolitical tensions and broader macroeconomic challenges are heavily impacting CAR’s operations and growth outlook. Rising interest rates, inflationary pressures and currency fluctuations have increased the cost of capital and vehicle acquisition, straining margins. Recent disruptions in Europe and the Middle East are curbing international tourism, a key revenue driver for rental car companies such as CAR.
The company does not offer quarterly dividends, leaving share price appreciation as the sole source of returns for its shareholders. This may make the stock less attractive to investors seeking regular dividend income.
CAR had a current ratio of 0.74 at the end of the first quarter of 2026, lower than the industry's average of 1.47. A current ratio below 1 often suggests that a company may not be well-positioned to meet its short-term obligations.
A couple of better-ranked stocks in the broader Zacks Transportation sector are Expeditors International of Washington, Inc. (EXPD - Free Report) and TFI International Inc. (TFII - Free Report) .
Expeditors International of Washington currently sports a Zacks Rank #1. EXPD has a long-term earnings growth expectation of 9%. The company delivered a trailing four-quarter earnings surprise of 14% on average.
TFI International currently holds a Zacks Rank #2 (Buy) and has a long-term earnings growth rate of 21%. TFII beat earnings estimates in each of the last four reported quarters, with an average surprise of 13.5%.
View the Zacks #1 Rank List
Image: Shutterstock
Reasons Why You Should Retain Avis Budget Stock in Your Portfolio
Key Takeaways
Shares of Avis Budget Group, Inc. (CAR - Free Report) have had an excellent run over the past month. The stock has risen 27.1% compared with the industry's 23.8% growth. The Zacks S&P 500 composite fell 0.3% during the said time frame.
One-Month Share Price Performance
Image Source: Zacks Investment Research
CAR has a Growth Score of B, which condenses key financial metrics to reflect a fair sense of the quality and sustainability of its growth.
The company’s second-quarter 2026 earnings are expected to increase 2,040% year over year. Earnings for 2026 and 2027 are projected to rise 127.8% and 167.6%, respectively, year over year. Revenues are expected to increase 2.4% in 2026 and 1.7% in 2027.
Factors That Bode Well for CAR
CAR’s revenue growth is primarily driven by its vehicle rental operations. It enjoys a large share of airport car rental revenues in North America, Europe and Australasia. Revenues in the Americas rose 2.9% year over year in the first quarter of 2026, delivering its first revenue increase in 10 quarters. This growth is supported primarily by stronger pricing rather than volume growth. The company’s revenue per day increased 2.8% year over year during the same time frame, representing the first quarter of positive pricing growth since late 2022.
The company has enhanced its fleet management strategy, cost control and operational efficiency to meet customers' demands. Transportation Security Administration (TSA) passenger volumes increased 1.6% in the last reported quarter. However, the company intentionally reduced its fleet size by 0.6%. This tighter alignment between supply and demand helped improve utilization and strengthen pricing. CAR accelerated vehicle dispositions, selling a record number of used cars in the Americas. Management also prioritized fleet normalization over maximizing individual vehicle sale prices, helping reduce depreciation costs more quickly while providing operational flexibility and potentially lowering maintenance costs going forward.
CAR focuses on the efficient execution of its operations. In the first quarter of 2026, the company reported its highest first-quarter fleet utilization rate in more than 15 years, despite navigating ongoing vehicle recalls, severe weather disruptions and broader geopolitical uncertainty. This higher utilization demonstrates the company's ability to generate more revenues from a smaller fleet while enhancing profitability.
CAR consistently returns value to shareholders through robust share repurchase programs. The company bought back shares worth $3.33 billion, $951 million, $70 million and $7 million in 2022, 2023, 2024 and 2025, respectively. Such moves instill shareholder confidence in its stock and generate growth.
Risks to Watch
Recent geopolitical tensions and broader macroeconomic challenges are heavily impacting CAR’s operations and growth outlook. Rising interest rates, inflationary pressures and currency fluctuations have increased the cost of capital and vehicle acquisition, straining margins. Recent disruptions in Europe and the Middle East are curbing international tourism, a key revenue driver for rental car companies such as CAR.
The company does not offer quarterly dividends, leaving share price appreciation as the sole source of returns for its shareholders. This may make the stock less attractive to investors seeking regular dividend income.
CAR had a current ratio of 0.74 at the end of the first quarter of 2026, lower than the industry's average of 1.47. A current ratio below 1 often suggests that a company may not be well-positioned to meet its short-term obligations.
Avis Budget currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
A couple of better-ranked stocks in the broader Zacks Transportation sector are Expeditors International of Washington, Inc. (EXPD - Free Report) and TFI International Inc. (TFII - Free Report) .
Expeditors International of Washington currently sports a Zacks Rank #1. EXPD has a long-term earnings growth expectation of 9%. The company delivered a trailing four-quarter earnings surprise of 14% on average.
TFI International currently holds a Zacks Rank #2 (Buy) and has a long-term earnings growth rate of 21%. TFII beat earnings estimates in each of the last four reported quarters, with an average surprise of 13.5%.