Shares of Avis Budget Group, Inc. CAR have gained 40.2% in the past three months compared with 3.1% rise of the industry it belongs to.
Image Source: Zacks Investment Research
The upside was primarily driven by enhanced technology, connected vehicles fleet and pro-investor steps.
Reasons for Upside
Avis Budget remains focused on expanding its connected vehicles fleet. The company’s connected car program enables customers to manage their entire rental through the Avis mobile app.
Expansion of connected cars fleet allows streamlining of operations and cost reduction. It enables enhanced tracking of idle vehicles and automated processing of cars ready to rent. Also, it facilitates real-time inventory counts, mileage management and automated maintenance notification.
Additionally, the massive data generated by these vehicles related to road conditions, accident prone zones, location mapping, weather report and user preferences while driving will actually be a much-prized resource for CAR, which can be monetized later.
Avis Budget continues to improve its technology and offerings. CAR is consistent in taking user-friendly steps by simplifying customers’ online interaction for easier reservation, pick-up and return process.
Avis Budget has an impressive track record of rewarding its shareholders through share repurchases. In 2021, 2020 and 2019, the company bought back shares worth $1.46 billion, $119 million and $67 million, respectively. Such moves underline the company’s confidence in business and help instill investors’ confidence in the stock by positively impacting earnings per share.
Favorable Estimate Revision
Driven by the above tailwinds, the Zacks Consensus Estimate for current-year earnings has moved up 12.2% to $52.75 per share in the past 60 days.
Zacks Rank and Stocks to Consider
Avis Budget currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Business Services sector are Automatic Data Processing, Inc. ADP and Cross Country Healthcare, Inc. CCRN.
Automatic Data Processing carries a Zacks Rank #2 (Buy) at present. ADP has a long-term earnings growth expectation of 12%.
ADP delivered a trailing four-quarter earnings surprise of 3.5%, on average.
Cross Country Healthcare is currently Zacks #2 Ranked. CCRN has a long-term earnings growth expectation of 6%.
CCRN delivered a trailing four-quarter earnings surprise of 10.1%, on average.
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