NasdaqGS:CAR

Stock Analysis Report

Executive Summary

Avis Budget Group, Inc., together with its subsidiaries, provides car and truck rentals, car sharing, and ancillary services to businesses and consumers.


Snowflake Analysis

Undervalued with acceptable track record.


Similar Companies

Share Price & News

How has Avis Budget Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CAR's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

33.4%

CAR

16.7%

US Transportation

9.9%

US Market


1 Year Return

-58.0%

CAR

-19.5%

US Transportation

-11.9%

US Market

Return vs Industry: CAR underperformed the US Transportation industry which returned -19.5% over the past year.

Return vs Market: CAR underperformed the US Market which returned -11.9% over the past year.


Shareholder returns

CARIndustryMarket
7 Day33.4%16.7%9.9%
30 Day-54.7%-15.1%-15.0%
90 Day-55.2%-20.3%-21.5%
1 Year-58.0%-58.0%-18.1%-19.5%-10.0%-11.9%
3 Year-50.5%-50.5%26.5%20.5%12.3%5.1%
5 Year-74.5%-74.5%33.4%32.6%32.5%18.1%

Price Volatility Vs. Market

How volatile is Avis Budget Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Avis Budget Group undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CAR ($14.65) is trading below our estimate of fair value ($56.21)

Significantly Below Fair Value: CAR is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CAR is good value based on its PE Ratio (3.6x) compared to the Transportation industry average (17.7x).

PE vs Market: CAR is good value based on its PE Ratio (3.6x) compared to the US market (13x).


Price to Earnings Growth Ratio

PEG Ratio: CAR's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: CAR is good value based on its PB Ratio (1.7x) compared to the US Transportation industry average (1.8x).


Next Steps

Future Growth

How is Avis Budget Group forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

-2.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CAR's earnings are forecast to decline over the next 3 years (-2.3% per year).

Earnings vs Market: CAR's earnings are forecast to decline over the next 3 years (-2.3% per year).

High Growth Earnings: CAR's earnings are forecast to decline over the next 3 years.

Revenue vs Market: CAR's revenue (0.4% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: CAR's revenue (0.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CAR's Return on Equity is forecast to be very high in 3 years time (48.7%).


Next Steps

Past Performance

How has Avis Budget Group performed over the past 5 years?

-1.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CAR has a large one-off loss of $102.0M impacting its December 31 2019 financial results.

Growing Profit Margin: CAR's current net profit margins (3.3%) are higher than last year (1.8%).


Past Earnings Growth Analysis

Earnings Trend: CAR's earnings have declined by -1.9% per year over the past 5 years.

Accelerating Growth: CAR's earnings growth over the past year (83%) exceeds its 5-year average (-1.9% per year).

Earnings vs Industry: CAR earnings growth over the past year (83%) exceeded the Transportation industry -12.4%.


Return on Equity

High ROE: Whilst CAR's Return on Equity (46.04%) is outstanding, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Avis Budget Group's financial position?


Financial Position Analysis

Short Term Liabilities: CAR's short term assets ($2.4B) exceed its short term liabilities ($2.3B).

Long Term Liabilities: CAR's short term assets ($2.4B) do not cover its long term liabilities ($20.1B).


Debt to Equity History and Analysis

Debt Level: CAR's debt to equity ratio (2215.1%) is considered high.

Reducing Debt: CAR's debt to equity ratio has increased from 1722.8% to 2215.1% over the past 5 years.

Debt Coverage: CAR's debt is not well covered by operating cash flow (17.8%).

Interest Coverage: CAR's interest payments on its debt are not well covered by EBIT (1.7x coverage).


Balance Sheet

Inventory Level: CAR has a low level of unsold assets or inventory.

Debt Coverage by Assets: CAR's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is Avis Budget Group's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate CAR's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate CAR's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if CAR's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CAR's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of CAR's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.4yrs

Average management tenure


CEO

Joe Ferraro (62yo)

0.17

Tenure

US$2,805,394

Compensation

Mr. Joseph A. Ferraro, also known as Joe, has been Interim Chief Executive Officer at Budget Rent A Car System, Inc. since 2020. Mr. Ferraro has been Interim Chief Executive Officer and Interim President a ...


CEO Compensation Analysis

Compensation vs Market: Joe's total compensation ($USD2.81M) is about average for companies of similar size in the US market ($USD3.18M).

Compensation vs Earnings: Joe's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Joseph Ferraro
Interim President & CEO0.17yrUS$2.81m0.14% $1.5m
John North
Executive VP & Chief Financial Officer1yrno datano data
Cathleen DeGenova
VP & Chief Accounting Officer0.58yrno data0.00038% $4.1k
David Calabria
Treasurer & Senior VP of Corporate Finance1.17yrsno data0.015% $161.9k
Gerard Insall
Chief Information Officer & Executive VPno datano datano data
Jean Sera
Senior VPno datano datano data
Vanessa Wolczak
Head of Marketing1.58yrsno datano data
Edward Linnen
Chief Human Resource Officer & Executive VP7yrsno data0.063% $686.2k
Izilda Martins
Interim President of Americas9.33yrsno data0.0069% $75.1k
Nina Bell
Managing Director of Northern Region4.83yrsno datano data

1.4yrs

Average Tenure

49yo

Average Age

Experienced Management: CAR's management team is not considered experienced ( 1.4 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
F. Salerno
Independent Director13.58yrsUS$237.42k0.048% $523.2k
Jeffrey Fox
Independent Director6.67yrsUS$229.36k0.027% $293.0k
Mary Choksi
Independent Director13yrsUS$240.81k0.012% $133.3k
Leonard Coleman
Independent Director22.25yrsUS$332.76k0.012% $134.5k
Lynn Krominga
Independent Director13.42yrsUS$243.17k0.0029% $31.4k
Bernardo Hees
Independent Chairman of the Board0.083yrno data0.58% $6.3m
Francis Shammo
Independent Director1.83yrsUS$150.85kno data
Brian Choi
Independent Director4.17yrsno datano data
Glenn Lurie
Independent Director1.83yrsUS$142.42kno data
Sanoke Viswanathan
Independent Director4yrsUS$218.76kno data

5.4yrs

Average Tenure

57.5yo

Average Age

Experienced Board: CAR's board of directors are considered experienced (5.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: CAR insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Avis Budget Group, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Avis Budget Group, Inc.
  • Ticker: CAR
  • Exchange: NasdaqGS
  • Founded: 1946
  • Industry: Trucking
  • Sector: Transportation
  • Market Cap: US$1.089b
  • Shares outstanding: 74.36m
  • Website: https://www.avisbudgetgroup.com

Number of Employees


Location

  • Avis Budget Group, Inc.
  • 6 Sylvan Way
  • Parsippany
  • New Jersey
  • 7054
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CUCADB (Deutsche Boerse AG)YesCommon SharesDEEURSep 1983
CARNasdaqGS (Nasdaq Global Select)YesCommon SharesUSUSDSep 1983
CAR *BMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNSep 1983
0HK4LSE (London Stock Exchange)YesCommon SharesGBUSDSep 1983
CUCABRSE (Berne Stock Exchange)YesCommon SharesCHCHFSep 1983

Biography

Avis Budget Group, Inc., together with its subsidiaries, provides car and truck rentals, car sharing, and ancillary services to businesses and consumers. It operates the Avis brand, a vehicle rental system that supply rental cars to the premium commercial and leisure segments of the travel industry; the Budget Truck brand, a local and one-way truck rental businesses with a fleet of approximately 20,000 vehicles, which are rented through a network of approximately 575 dealer-operated and 420 company-operated locations that serve the consumer and light commercial sectors in the continental United States; and the Zipcar brand, a car sharing network. The company also operates various other car rental brands, such as Payless, Apex, Maggiore, Morini Rent, FranceCars, and Turiscar. In addition, it offers optional insurance products and coverages, such as supplemental liability, personal accident, personal effects protection, emergency sickness protection, and cargo insurance products; fuel service options, chauffeur drive services, roadside assistance services, electronic toll collection services, curbside delivery, tablet rentals, access to satellite radio, portable navigation units, and child safety seat rentals; automobile towing equipment and other moving accessories, such as hand trucks, furniture pads, and moving supplies; and Business Intelligence solution, an online portal for corporate travel. Avis Budget Group, Inc. operates in approximately 5,500 locations worldwide. The company was formerly known as Cendant Corporation and changed its name to Avis Budget Group, Inc. in September 2006. Avis Budget Group, Inc. was founded in 1946 and is headquartered in Parsippany, New Jersey. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/29 03:05
End of Day Share Price2020/03/27 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.