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

It has been about a month since the last earnings report for Avis Budget Group (CAR). Shares have lost about 2.3% 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 Misses Q1 Earnings Estimates

Avis Budget Group, Inc. reported mixed first-quarter 2024 results, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same.

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 slight margin but decreased marginally year over year.

Segmental Revenues

Revenues from Americas amounted to $2 billion, reflecting a decrease of 1% from the year-ago quarter. The metric was in line with our estimate.

International revenues were $558 million, up 3% year over year. The figure missed our estimation of $567.1 million.

Profitability

Adjusted EBITDA was $12 million, down 98% from fourth-quarter 2023. The Americas segment reported an adjusted EBITDA of $44 million, which declined 91% from the year-ago quarter. Internationally, adjusted EBITDA loss was reported to be $15 million, down more than 100% from the year-ago quarter.

Balance Sheet and Cash Flow

Avis Budget exited the first quarter with cash and cash equivalents of $522 million compared with $555 million at the end of fourth-quarter 2023. Corporate debt amounted to $5.4 billion compared with $4.82 billion reported in the preceding quarter.

CAR generated $589 million in net cash from operating activities. Adjusted free cash flow utilized amounted to $639 million. Capital expenditures were $56 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -31.43% due to these changes.

VGM Scores

At this time, Avis Budget has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Avis Budget has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

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