Avis Budget Group, Inc. ($CAR) Earnings (Q3 FY22)

 Avis Budget Group, Inc. ($CAR) Earnings and Opinion:


Avis is a company in the Industrials sector and operates in the Rental & Leasing Services industry. The company provides car and truck rentals, car sharing, and ancillary products and services to businesses and consumers. Avis was founded in 1946 and is currently headquartered in Parsippany, New Jersey. The company made its debut on the stock market in 1997. 

Avis Financial Results:

  • Revenue of $3.55B beating expectations of $3.54B
  • Adj EBITDA of $1.46B beating expectations of $1.07B
  • SG&A Expenses of $384M missing expectations of $408.77M
  • Adj Diluted EPS of $21.70 beating expectations of $14.72
Opinion:
Avis is currently rising in the after-hours market. The company reported its earnings after the market closed this afternoon. The profitability led the charge in a solid quarter. Avis is thanking the demand in travel remaining strong even with consumers dealing with high inflation. The company is looking to carry this momentum into the holiday season. Executives think they have a possibility of doing it, even with numbers probably going to come in lower because summer seems to be the hot time for this company. I liked the beat on these key metrics. I think this could carry some momentum in the short-term with this one. Looking at the current valuation, the stock seems to be a bit undervalued. The P/E ratio sits at 4.6, compared to peers at 6.29. EV/EBITDA is at 5.09, which is also lower than the peers median at 5.43. In my opinion, I think this stock is seen as more of a meme stock. However, if you think its a long-term play, now may be a valuation you would like. I remember the volatility being so crazy around this stock, and that is one reason I dislike it. It seems as if this report had a little bit of a seasonality sense with it capturing the end of the summer. Management seems to be optimistic about the future based off this report. I am not completely calling this a stock to avoid, but it is one you definitely need to keep a close eye on, because it could go one of two ways real quick.

*Information from Bloomberg and Yahoo Finance

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