Why Is Avis Budget (CAR) Down 3.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Avis Budget Group (CAR). Shares have lost about 3.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Avis Budget due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Avis Budget Surpasses Q2 Earnings Estimates
Avis Budget reported mixed second-quarter 2023 results wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Adjusted earnings of $11.01 per share beat the Zacks Consensus Estimate by more than 12.5% but plunged 30.9% year over year. Total revenues of $3.12 billion missed the consensus estimate by 2.7% and declined 3.7% year over year.
Segmental Revenues
The Americas segment’s revenues of $2.43 billion were down 5% year over year. The figure missed our estimate of $2.46 billion.
The International segment’s revenues of $695 million beat our estimate of $676.7 million and were up 3% year over year.
Profitability
Adjusted EBITDA was $737 million, down 39% year over year. Adjusted EBITDA margin was 23.6%, compared with 37.1% in the year-ago quarter.
Adjusted EBITDA for the Americas segment was $631 million, down 39% year over year. Internationally, adjusted EBITDA was $126 million, 31% lower than the year-ago figure.
Balance Sheet and Cash Flow
Avis Budget exited second-quarter 2023 with cash and cash equivalents of $571 million, compared with $548 million at the end of the prior quarter. Corporate debt was $4.7 billion, flat with the reported figure at the end of the prior quarter.
CAR generated $963 million in net cash from operating activities in the reported quarter. Adjusted free cash flow was $202 million while capital expenditures were $78 million in the reported quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 9.63% due to these changes.
VGM Scores
Currently, Avis Budget has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Avis Budget has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Avis Budget Group, Inc. (CAR) : Free Stock Analysis Report
