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1. Company Snapshot

1.a. Company Description

Avis Budget Group, Inc., together with its subsidiaries, provides car and truck rentals, car sharing, and ancillary products and services to businesses and consumers.It operates the Avis brand, that offers vehicle rental and other mobility solutions to the premium commercial and leisure segments of the travel industry; the Budget Truck brand, a local, and one-way truck and cargo van rental businesses with a fleet of approximately 20,000 vehicles, which are rented through a network of approximately 465 dealer-operated and 385 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 Budget, Payless, Apex, Maggiore, MoriniRent, FranceCars, Amicoblue, Turiscar, and ACL Hire.


In addition, it offers optional insurance products and coverages, such as supplemental liability, personal accident, personal effects protection, emergency sickness protection, and automobile towing protection and cargo insurance products; fuel service options, 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 10,400 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.

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1.b. Last Insights on CAR

Avis Budget Group, Inc. faced negative drivers, including mixed segmental results, despite beating earnings and revenue estimates in Q3 2025. An ongoing investigation into Car-Mart, a separate entity, has raised concerns among investors. Additionally, the company's "Reduce" consensus rating from brokerages, with three sell and five hold recommendations, may have impacted investor sentiment. A $1.30 million investment by Y Intercept Hong Kong Ltd may not be sufficient to offset these concerns.

1.c. Company Highlights

2. Avis Budget Group's Q3 2025 Earnings: A Mixed Bag

Avis Budget Group reported revenue of $3.51 billion for Q3 2025, a modest 1% increase from $3.48 billion in the same quarter last year. However, the company's Americas RPD declined 3% to $65, a result that management was not satisfied with, given the inflationary pressures. Despite this, the company's consolidated adjusted EBITDA increased 11% year-over-year. The company's EPS came out at $10.96, significantly beating analyst estimates of $8.11. As Brian Choi, CEO, noted, "You have to grow both volume and price by delivering a product that wins the customer's share of wallet."

Publication Date: Oct -29

📋 Highlights
  • Revenue Growth:: Q3 revenue reached $3.51 billion, a $39 million increase from $3.48 billion in the prior year.
  • Summer Performance:: Revenue grew 1% year-over-year, with consolidated adjusted EBITDA rising 11% during the summer months.
  • Avis First Launch:: Achieved a 4.9-star customer rating, driving customer satisfaction and margin expansion through enhanced service quality.
  • Recall Impact:: Vehicle recalls caused a $90–$100 million annualized cost and a 2.8-point utilization decline in Q3, with 5% of the Americas fleet grounded.
  • International EBITDA Surge:: Strategic shifts in the international segment boosted EBITDA by 40% year-over-year, driven by higher RPD leisure demand and pruning low-return markets.

Operational Highlights

The company has been focusing on customer experience, launching Avis First, a new product that has achieved an average customer rating of 4.9 stars. The company is also investing in the customer journey, including predictability, speed, and empowerment, and reengineering its contact center model with an AI lens. In fleet management, the company managed to maintain a utilization rate despite the massive increase in recall vehicles being held back for repair.

Recall Impact and Cost Management

The recall impact has been significant, with a 2.8-point utilization impact in Q3 due to 5% of the Americas fleet being grounded. The company estimates a cost impact of $90 million to $100 million for the full year, mostly due to depreciation, interest, shuttling, and parking expenses. However, the company is working to mitigate this impact, with plans to provide vehicles to customers for the World Cup and America 250, expecting a net positive impact.

International Segment Performance

The international segment is a smaller but significant segment for the company, driving upside in revenue per day (RPD) and EBITDA. The leadership team has implemented strategic changes, increasing exposure to higher RPD leisure demand and exiting lower-return local market monthly business, leading to a 40% year-over-year increase in EBITDA.

Valuation and Outlook

With a P/S Ratio of 0.44 and EV/EBITDA of 6.34, the stock appears to be reasonably valued. Analysts estimate revenue growth of 2.2% for next year. The company's focus on customer experience, cost management, and strategic changes in the international segment are expected to drive future growth. The ROIC of 10.67% and ROE of 81.61% indicate a strong return on capital. However, the Net Debt / EBITDA ratio of 3.89 may be a concern for investors.

3. NewsRoom

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Bristol Myers Squibb's Breyanzi Approved by the U.S. FDA as the First and Only CAR T Cell Therapy for Adults with Relapsed or Refractory Marginal Zone Lymphoma (MZL)

Dec -05

Source: businesswire.com

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37,421 Shares in Avis Budget Group, Inc. $CAR Acquired by Franklin Resources Inc.

Dec -01

Source: defenseworld.net

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Why Is Avis Budget (CAR) Down 8% Since Last Earnings Report?

Nov -26

Source: zacks.com

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Bristol Myers Squibb Receives Approval from the European Commission to Expand Use of CAR T Cell Therapy Breyanzi for Relapsed or Refractory Mantle Cell Lymphoma

Nov -24

Source: businesswire.com

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BROAD ARROW ANNOUNCES, “GLOBAL ICONS,” AN ONLINE COLLECTOR CAR AND MEMORABILIA SALE SCHEDULED FOR JANUARY 2026

Nov -20

Source: globenewswire.com

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Tempest Announces Strategic Acquisition of New Dual-CAR T Programs from Factor with Simultaneous Runway Extension Projected to Mid 2027

Nov -19

Source: globenewswire.com

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Anixa Biosciences Announces World Health Organization (WHO) Approval of International Non-Proprietary Name for its CAR-T Therapy, Marking a Key Milestone Toward Global Recognition and Future Commercialization

Nov -17

Source: prnewswire.com

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FAULKNER COLLISION CENTER OF LANCASTER AND MANAGER APRIL LAUSCH HONORED WITH NATIONAL I-CAR AWARDS

Nov -05

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (13.68%)

6. Segments

Online Advertising Services

Expected Growth: 15%

Avis Budget Group's online advertising services growth is driven by increasing online travel bookings, rising demand for digital marketing, and strategic partnerships with travel companies. Additionally, the company's investment in data analytics and targeted advertising platforms has improved customer engagement, contributing to the 15% growth.

North America

Expected Growth: 12%

Avis Budget Group, Inc.'s 12% growth in North America is driven by increasing demand for car rentals, particularly in the leisure travel segment. Strong airport demand, improved pricing, and a growing presence in the used car market also contribute to this growth. Additionally, the company's focus on cost savings initiatives and investments in digital technologies have enhanced operational efficiency and customer experience.

Asia

Expected Growth: 18%

Avis Budget Group's 18% growth in Asia is driven by increasing demand for car rentals from tourists and business travelers, particularly in China and Southeast Asia. The region's growing middle class, infrastructure development, and government initiatives to promote tourism also contribute to the growth. Additionally, Avis Budget's strategic partnerships and investments in digital platforms have enhanced customer experience and increased online bookings.

Carsales Investments

Expected Growth: 8%

Avis Budget Group's 8% growth in Carsales Investments is driven by increasing online car sales, rising demand for used cars, and strategic partnerships with leading automotive companies. Additionally, the company's focus on digital marketing, improved customer experience, and expansion into new markets have contributed to this growth.

Data, Research and Services

Expected Growth: 10%

Avis Budget Group's 10% growth in Data, Research, and Services is driven by increasing demand for mobility solutions, expansion of its fleet management services, and strategic partnerships. Additionally, investments in digital transformation, data analytics, and customer experience enhancements are contributing to the segment's growth.

Latin America

Expected Growth: 11%

Avis Budget Group, Inc.'s 11% growth in Latin America is driven by increasing demand for car rentals from tourists and business travelers, particularly in countries like Brazil, Mexico, and Chile. Additionally, the company's strategic partnerships with local airlines and travel agencies, as well as its investment in digital platforms, have contributed to the region's growth.

7. Detailed Products

Avis Car Rental

Avis Car Rental is a car rental service that provides a wide range of vehicles for rent, including economy, compact, intermediate, standard, full-size, premium, and luxury cars, as well as SUVs, vans, and trucks.

Budget Car Rental

Budget Car Rental is a car rental service that offers a variety of vehicles at affordable prices, including economy, compact, intermediate, standard, and full-size cars, as well as SUVs and vans.

Zipcar Car Sharing

Zipcar is a car-sharing service that provides members with access to a fleet of vehicles for short periods of time, ideal for errands, trips, and daily activities.

Payless Car Rental

Payless Car Rental is a car rental service that offers a range of vehicles at discounted prices, including economy, compact, intermediate, and standard cars, as well as SUVs and vans.

Apex Car Rental

Apex Car Rental is a car rental service that offers a range of vehicles, including economy, compact, intermediate, and standard cars, as well as SUVs and vans, at discounted prices.

Magical Autos

Magical Autos is a car rental service that offers a range of luxury and specialty vehicles, including sports cars, convertibles, and SUVs.

8. Avis Budget Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Avis Budget Group, Inc. faces moderate threat from substitutes due to the presence of alternative transportation options such as public transportation, biking, and walking.

Bargaining Power Of Customers

Avis Budget Group, Inc. has a large customer base, which reduces the bargaining power of individual customers. Additionally, the company's loyalty programs and rewards schemes help to retain customers.

Bargaining Power Of Suppliers

Avis Budget Group, Inc. relies on a few large suppliers for its fleet of vehicles, which gives these suppliers some bargaining power. However, the company's large scale of operations and long-term contracts help to mitigate this risk.

Threat Of New Entrants

The car rental industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This makes it difficult for new entrants to challenge Avis Budget Group, Inc.'s market position.

Intensity Of Rivalry

The car rental industry is highly competitive, with several major players competing for market share. Avis Budget Group, Inc. faces intense rivalry from companies such as Enterprise Holdings and Hertz Global Holdings.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 106.91%
Debt Cost 4.73%
Equity Weight -6.91%
Equity Cost 15.32%
WACC 4.00%
Leverage -1546.99%

11. Quality Control: Avis Budget Group, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

134.85$

Current Price

134.85$

Potential

-0.00%

Expected Cash-Flows