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Avis Budget Banks on Partnerships & Technology Enhancements

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Avis Budget Group, Inc. (CAR - Free Report) has rallied a massive 91.9% over the past year, significantly outperforming the 7.6% increase of the industry it belongs to. The company’s focus on widening its global network and coverage, and enhancing technology to improve its offerings is commendable.


In first-quarter 2018, Avis Budget incurred adjusted loss of 74 cents per share compared with a loss of 94 cents in the year-ago quarter incurred adjusted loss of 74 cents per share compared with a loss of 94 cents in the year-ago quarter. The reported figure was narrower than the Zacks Consensus Estimate of a loss of $1.04. Total revenues came in at $1,968 million, which surpassed the Zacks Consensus Estimate of $1,954 million and increased 7% on a year-over-year basis.

Also, the company’s earnings surprise history has been impressive. Avis Budget outpaced consensus estimates in three of the trailing four quarters, with an average positive surprise of 35.4%. For the second quarter, the same moved up 3.6% over the past 30 days.

Enhancing Global Footprint

In an effort to enhance its global footprint, Avis Budget invests in markets where car rental demand is on the rise.  In 2017, Zipcar — the leading car-sharing network and subsidiary of the company — forayed into Iceland, Taiwan and Costa Rica. Notably, Zipcar has significant presence in over 500 cities and towns across Europe, Asia and North America. By expanding footprint in various countries, the company has widened its global network and coverage to almost all the major regions of the world.

This apart, Avis Budget remains focused on fortifying its fleet with the addition of latest car models from leading manufactures to attract customers. We believe that these strategies, along with better customer support systems should boost the company’s top line.

Technology Enhancement

The company continues enhancing its technology and improving offerings. It is consistently trying to simplify customers’ online interaction to make the reservation, pick-up and return process more easy and user-friendly. It entered into partnerships with various product and technology companies to enhance user experience with mobile and technology capabilities. By virtue of its partnerships with Alphabet and Amazon, users are likely to have voice-controlled access to the Avis Budget’s services via Google Assistant and Amazon Alexa enabled devices.

Zacks Rank & Other Stocks to Consider

Avis Budgetsports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Some other top-ranked stocks in the broader Business Services sector include Convergys Corp. , Automatic Data Processing (ADP - Free Report) and Broadridge Financial Solutions Inc. (BR - Free Report) , each carrying a Zacks Rank #2 (Buy).

The long-term expected earnings per share growth rate for Convergys, Automatic Data Processing and Broadridge is 9%, 11% and 10%, respectively.

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