Nasdaq:CAR
AVIS BUDGET GROUP, INC.
A global car rental giant offering fleet management solutions and daily rentals under the trusted Avis and Budget brand names worldwide.
Key Metrics
Investment Thesis
Bull Case
Despite recent accounting losses, the company's robust operating cash flow of $3.30B suggests underlying business resilience and potential for turnaround as they optimize their fleet mix and reduce high levels of accumulated other comprehensive income loss of -$138M.
Bear Case
The stock presents a high-risk profile given the substantial shareholders equity deficit of -$3.12B, retained earnings deficit of $1.14B, and a sharp decline in net income from $2.76B in 2022 to a negative $995M recently, signaling deteriorating profitability.
About AVIS BUDGET GROUP, INC.
AVIS BUDGET GROUP INC (CAR) is a leading global car rental provider serving customers across North America and internationally through its Avis and Budget brands. The company generates revenue primarily by renting passenger vehicles to individuals and businesses, with significant operations in the automotive rental industry.
Analysis
Management Discussion
Management recently navigated challenging financial conditions resulting in a net profit deficit of -$995M and operating profit of -$929M, though operations generated strong cash flow from activities of $3.30B which partially offset the cash burn from investing initiatives.
Industry Overview
The car rental industry is highly competitive with thin margins driven by fuel costs, vehicle depreciation, and fleet utilization rates, requiring companies like CAR to manage billions in assets including $29.16B in long-term assets while competing against major rivals for market share.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $11.99B | $12.01B | $11.79B | $11.65B |
| Cost of Revenue | $0 | $0 | $0 | $0 |
| Gross Profit | $11.99B | $12.01B | $11.79B | $11.65B |
| Operating Expenses | $8.36B | $10.09B | $14.42B | $12.58B |
| Operating Income | $3.64B | $1.91B | $-2.63B | $-929.0M |
| G&A | $1.35B | $1.41B | $1.35B | $1.45B |
| Stock-Based Comp | $25.0M | $30.0M | $19.0M | $19.0M |
| Amortization | $44.0M | $29.0M | $30.0M | $23.0M |
| Other OpEx | $7.01B | $8.69B | $13.06B | $11.13B |
| Non-Operating Income | $0 | $0 | $0 | $0 |
| Interest Expense | $250.0M | $296.0M | $358.0M | — |
| Pre-Tax Income | $3.64B | $1.91B | $-2.63B | $-929.0M |
| Income Tax | $880.0M | $279.0M | $-810.0M | $66.0M |
| Continuing Ops | $2.76B | $1.64B | $-1.82B | $-995.0M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $2.76B | $1.64B | $-1.82B | $-995.0M |
| Minority Interest | $-8.0M | $3.0M | $4.0M | $-106.0M |
| Net to Common | $2.76B | $1.63B | $-1.82B | $-889.0M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $1.89B | $2.14B | $2.03B | $2.09B |
| Cash & Equivalents | $570.0M | $555.0M | $534.0M | $519.0M |
| Other Current Assets | $1.32B | $1.58B | $1.50B | $1.57B |
| Long-Term Assets | $24.04B | $30.43B | $27.01B | $29.16B |
| PP&E (Net) | $594.0M | $719.0M | $697.0M | $748.0M |
| Intangibles | $666.0M | $670.0M | $601.0M | $589.0M |
| Goodwill | $1.07B | $1.10B | $1.07B | $1.13B |
| Operating Leases | $2.40B | $2.65B | $3.06B | $3.24B |
| Other LT Assets | $19.31B | $25.29B | $21.58B | $23.46B |
| Total Assets | $25.93B | $32.57B | $29.04B | $31.26B |
| Current Liabilities | $2.57B | $2.66B | $2.72B | $2.89B |
| Accounts Payable | $466.0M | $487.0M | $450.0M | $453.0M |
| Current Leases | $555.0M | $576.0M | $628.0M | $680.0M |
| Deferred Revenue | $188.0M | $168.0M | $149.0M | $155.0M |
| Other Current Liab | $1.36B | $1.43B | $1.49B | $1.60B |
| Long-Term Liabilities | $24.05B | $30.25B | $28.64B | $31.48B |
| Long-Term Debt | $4.64B | $4.79B | $5.37B | $6.05B |
| LT Operating Leases | $1.88B | $2.12B | $2.48B | $2.61B |
| Other LT Liab | $17.52B | $23.34B | $20.78B | $22.82B |
| Total Liabilities | $26.63B | $32.91B | $31.36B | $34.37B |
| Shareholders' Equity | $-700.0M | $-343.0M | $-2.32B | $-3.12B |
| Paid-In Capital | $6.67B | $6.63B | $6.62B | $6.62B |
| Retained Earnings | $2.58B | $3.85B | $2.03B | $1.14B |
| AOCI | $-101.0M | $-96.0M | $-210.0M | $-138.0M |
| Total L&E | $25.93B | $32.57B | $29.04B | $31.26B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $2.76B | $1.64B | $-1.82B | $-995.0M |
| Non-Cash Adjustments | $1.81B | $2.63B | $5.23B | $4.38B |
| Working Capital Changes | $137.0M | $-441.0M | $107.0M | $-86.0M |
| Cash from Operations | $4.71B | $3.83B | $3.52B | $3.30B |
| Cash from Investing | $-4.30B | $-7.35B | $-2.75B | $-5.16B |
| Share Buybacks | $3.33B | $951.0M | $70.0M | $7.0M |
| Dividends Paid | — | $355.0M | $0 | $0 |
| Cash from Financing | $-360.0M | $3.51B | $-781.0M | $1.86B |
| FX Effect | $-32.0M | $14.0M | $-31.0M | $31.0M |
| Net Change in Cash | $16.0M | $2.0M | $-47.0M | $21.0M |
| Beginning Cash | $626.0M | $642.0M | $644.0M | $597.0M |
| Ending Cash | $642.0M | $644.0M | $597.0M | $618.0M |
Frequently Asked Questions
How does AVIS BUDGET GROUP, INC. make money?
The company's financials reflect a primary business segment focused on vehicle rental operations generating $11.65B in revenue, supported by substantial long-term operating lease assets of $3.24B and liabilities of $2.61B indicating heavy asset utilization models typical of the rental sector.
What are the main risks for CAR?
Investors face significant risks including the severe net loss of $995M reported for the latest period, a massive cash outflow from investing activities of -$5.16B likely tied to fleet acquisitions or disposals, and the challenge of maintaining profitability amidst high operating expenses totaling $12.58B.
What is CAR's competitive advantage?
The firm leverages a vast global fleet network under strong brand recognition to capture diverse customer segments from leisure travelers to corporate fleets, while managing high accounts payable leverage of $453M to optimize working capital efficiency in an asset-heavy model.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.