A Look at Avis Budget Group’s (CAR) Valuation as It Launches Premium ‘Avis First’ Service in Europe

Avis Budget Group (CAR) is making moves to capture demand for higher-end travel with the European launch of Avis First, a concierge-style premium rental service at major airports. This strategic shift highlights the company’s growth ambitions in the evolving mobility market.

See our latest analysis for Avis Budget Group.

Avis Budget Group’s launch of its high-touch premium service comes after a year of dramatic swings for the stock, with recent events ranging from industry innovations to headline-grabbing internal incidents. The standout 95.2% year-to-date share price return far outpaces sector peers and helps overshadow short-term weakness. A substantial five-year total shareholder return of 390.8% highlights the company’s resilience and long-term growth potential even as short-term volatility remains high.

If Avis’s shift toward premium can surprise the market, just imagine what you could find by exploring fast growing stocks with high insider ownership.

With such a dramatic run-up in Avis Budget Group’s share price and bold new moves in the premium travel segment, the question remains: is the stock still undervalued, or has the market already priced in this next chapter of growth?

Most Popular Narrative: 6% Overvalued

The most widely followed narrative pegs fair value at $148, which is slightly below the last close price of $157.01. Here is what is driving strong opinions about whether gains can hold from here.

The partnership with Waymo and stated ambitions to become a core fleet and asset manager for autonomous vehicles is stoking future growth narratives, with investors projecting Avis will capture a sizable share of vehicle miles traveled (VMT) in the autonomous mobility ecosystem, leading to long-term revenue and free cash flow expansion that may not be realized if AV adoption or partnership economics disappoint.

Read the complete narrative.

What is the real engine behind this ambitious valuation? The narrative hinges on outsize growth in both earnings and profit margins, fueled by bold moves into new technology partnerships and premium services. Find out which specific financial leaps analysts are betting on and see if you agree with how they stack up future gains.

Result: Fair Value of $148 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, shifting travel habits and intensifying competition in the premium rental space could challenge both the revenue growth story and the potential for future margin expansion.

Find out about the key risks to this Avis Budget Group narrative.

Another View: Multiples Suggest Relative Undervaluation

Taking a different approach, Avis Budget Group trades at a 0.5x price-to-sales ratio, which is much lower than the industry average of 1.3x and the peer average of 2.6x, and well below its estimated fair ratio of 0.9x. This deep discount signals a potential opportunity if the market adjusts upward. However, the reason for such a gap remains unclear.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Avis Budget Group Narrative

If you see things differently or want to dig deeper into the numbers on your own terms, you can put your own spin on the narrative in just a few minutes, so why not Do it your way.

A great starting point for your Avis Budget Group research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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