Avis Budget (CAR) Down 2.3% Since Last Earnings Report: Can It Rebound?

It has been about a month since Avis Budget Group’s (CAR) last earnings report. Shares have lost about 2.3% in that time, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Avis Budget poised for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the company’s most recent earnings report in order to better understand the important catalysts.

Avis’ budget does not include first-quarter earnings estimates

Avis Budget Group, Inc. reported mixed first-quarter 2024 results, with earnings missing the Zacks Consensus Estimate but revenues remaining flat.

CAR’s adjusted loss was $3.2 per share compared with the Zacks Consensus Estimate of a loss of $3.15 and year-ago earnings of $7.72. Total revenues of $2.6 billion beat the consensus estimate by a small margin, but were down slightly year-over-year.

Segment revenues

Revenue in the Americas was $2 billion, down 1% from the year-ago quarter. The indicator was in line with our estimates.

International revenues were $558 million, up 3% year-over-year. This amount exceeded our estimate of $567.1 million.

Profitability

Adjusted EBITDA was $12 million, a decline of 98% compared to the fourth quarter of 2023. The Americas segment posted adjusted EBITDA of $44 million, a decline of 91% compared to the same quarter last year. Internationally, adjusted EBITDA loss was $15 million, a decline of more than 100% compared to the same quarter last year.

Balance sheet and cash flow

Avis Budget ended the first quarter with cash and cash equivalents of $522 million, compared to $555 million at the end of the fourth quarter of 2023. Corporate debt was $5.4 billion, compared to $4.82 billion reported in the previous quarter.

CAR generated $589 million of net cash from operations. Adjusted free cash flow used was $639 million. Capital expenditure amounted to $56 million.

How have estimates changed since then?

Over the last month, investors have seen a downward trend in estimate revisions.

As a result of these changes, the consensus estimate moved by -31.43%.

VGM results

At the moment, Avis Budget has a Weak Growth Score of D, although slightly behind its Momentum Score of F. However, the stock is rated A for Value, putting it in the top 20% for this investment strategy.

Overall, the stock has a Total VGM Score of C. If you’re not focused on one strategy, this score should interest you.

Perspectives

Estimates for this company are generally on a downward trend, and the magnitude of these revisions indicates a downward shift. No wonder Avis Budget is sporting a Zacks Rank #4 (Sell). We expect a below-average rate of return on stocks in the coming months.

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