Avis Budget (CAR) Down 12.7% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Avis Budget Group (CAR). Shares have lost about 12.7% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Avis Budget Misses Q2 Earnings Estimates
Avis Budget Group, Inc. reported lower-than-expected second-quarter 2024 results.
CAR’s earnings of 41 cents per share missed the Zacks Consensus Estimate by 84.2% and decreased 96.3% from the year-ago quarter’s actual. Total revenues of $3 billion missed the consensus estimate by 4% and decreased 2.4% on a year-over-year basis.
Segmental Revenues
Revenues from the Americas amounted to $2.4 billion, reflecting a decrease of 3% from the year-ago quarter. The metric was in line with our estimate.
International revenues were $687 million, up 3% on a year-over-year basis. However, the figure missed our anticipation of $716.3 million. The segment is likely to have been driven by improvements in inter-European cross-border travel and significant strength in international inbound volume.
Profitability
Adjusted EBITDA was $214 million, down 71% from second-quarter 2023. The Americas segment reported an adjusted EBITDA of $186 million, which declined 71% from the year-ago quarter. Internationally, adjusted EBITDA of $48 million dipped 62% on a year-over-year basis.
Balance Sheet and Cash Flow
Avis Budget exited the second quarter with cash and cash equivalents of $511 million against $522 million at the end of the first quarter of 2024. Corporate debt amounted to $5.3 billion versus $5.4 billion reported in the preceding quarter.
CAR generated $884 million in net cash from operating activities. Adjusted free cash flow amounted to $171 million. Capital expenditures were $52 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -16.3% due to these changes.
VGM Scores
Currently, Avis Budget has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, 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 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 #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Avis Budget belongs to the Zacks Transportation - Services industry. Another stock from the same industry, C.H. Robinson Worldwide (CHRW), has gained 4.5% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
C.H. Robinson reported revenues of $4.48 billion in the last reported quarter, representing a year-over-year change of +1.4%. EPS of $1.15 for the same period compares with $0.90 a year ago.
For the current quarter, C.H. Robinson is expected to post earnings of $1.08 per share, indicating a change of +28.6% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.1% over the last 30 days.
C.H. Robinson has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Avis Budget Group, Inc. (CAR) : Free Stock Analysis Report
C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report