A wise investment decision involves buying well-performing stocks at the right time while selling those that are at risk. A rise in share price and strong fundamentals signal a stock’s bullish run.
Avis Budget Group, Inc. (CAR - Free Report) is a business services stock that has performed well over the past year and has the potential to carry the momentum in near term. Therefore, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.
Let’s take a look at the factors that make the stock an attractive pick.
Share Price Performance
A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourse over the past year. Avis Budget has gained 16.7%, which compared favorably with the industry’s increase of 6.2%.
Solid Rank & VGM Score
Avis Budget has a Zacks Rank #1 (Strong Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 or 2 (Buy) offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Positive Earnings Surprise History
Avis Budget has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in three of the trailing four quarters, with an average beat of 35.4%.
Strong Growth Prospects
The Zacks Consensus Estimate for 2018 earnings of $3.55 reflects year-over-year growth of 24.6%. Moreover, earnings are expected to register 8.9% growth in 2019.
Solid Growth Drivers
Avis Budget operates through distinct global brands that focus on different market segments and complement other brands in their respective regional markets. While Avis is a premium brand that targets corporate and upscale leisure travelers, Budget is a mid-tier brand eyeing value conscious traveler. Payless is a deep-value brand, while FranceCars, Maggiore and Apex are recognized regional brands and Zipcar offers an urban alternative to car ownership.
Avis Budget’s ability to cater to a wide range of mobility demands helps it expand and strengthen global foothold through organic growth.
Avis Budget Group, Inc. Revenue (TTM)
In fact, Avis Budget’s expansion strategy has been in full swing, courtesy of alliances, acquisitions and joint ventures. Moreover, in an effort to enhance its global footprint, the company invests in other growing markets where car rental demand is on the rise. In 2017, Zipcar — the leading car-sharing network and subsidiary of Avis Budget — forayed into Iceland, Taiwan and Costa Rica.
Zipcar has a significant presence in over 500 cities and towns across Europe, Asia and North America. By expanding footprint in various countries, Zipcar 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 are likely to boost the company’s top line.
Avis Budget also continues to enhance its technology and improve offerings. The company is consistently trying to simplify customers’ online interaction to make the reservation, pick-up and return process more easy and user-friendly.
Furthermore, 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.
Other Stocks to Consider
Some other top-ranked stocks worth considering in the broader Business Services sector include Automatic Data Processing (ADP - Free Report) , Vectrus (VEC - Free Report) and First Data Corporation (FDC - Free Report) . While Automatic Data Processing sports a Zacks Rank #1, Vectrus and First Data carry a Zacks Rank #2.
In the trailing four quarters, Automatic Data Processing, Vectrus and First Data delivered a positive earnings surprise of 5.2%, 25.9% and 2.9%, respectively.
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