Avis Budget Group, Inc. Reported A Surprise Loss, And Analysts Have Updated Their Forecasts

Avis Budget Group, Inc. (NASDAQ:CAR) shareholders are probably feeling a little disappointed, since its shares fell 4.0% to US$87.19 in the week after its latest full-year results. Revenues came in at US$12b, in line with estimates, while Avis Budget Group reported a statutory loss of US$51.23 per share, well short of prior analyst forecasts for a profit. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Avis Budget Group

Following last week's earnings report, Avis Budget Group's seven analysts are forecasting 2025 revenues to be US$12.0b, approximately in line with the last 12 months. Avis Budget Group is also expected to turn profitable, with statutory earnings of US$9.67 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$12.0b and earnings per share (EPS) of US$10.04 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

The consensus price target held steady at US$119, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Avis Budget Group at US$140 per share, while the most bearish prices it at US$95.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Avis Budget Group's revenue growth is expected to slow, with the forecast 1.4% annualised growth rate until the end of 2025 being well below the historical 13% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.6% per year. Factoring in the forecast slowdown in growth, it seems obvious that Avis Budget Group is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Avis Budget Group. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Avis Budget Group's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$119, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Avis Budget Group. Long-term earnings power is much more important than next year's profits. We have forecasts for Avis Budget Group going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Avis Budget Group that we have uncovered.

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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.