Is Avis Budget Group Inc. (CAR) A Good Investment?

Avis Budget Group Inc. (NASDAQ:CAR) finished Thursday with a subtraction of -$2.13 to close at $126.45, a downside of -1.66 percent. An average of 1,613,800 shares of common stock have been traded in the last five days. There was a gain of $9.94 in the past week. The last 20 days have seen an average of 2,046,110 shares traded, while the 50-day average volume stands at 1,951,948.

CAR stock has increased by 40.05% in the last month. The company shares reached their 1-month lowest point of $85.68 on 09/13/21. With the stock rallying to its 52-week high on 10/07/21, shares of the company touched a low of $28.20 and a high of $129.66 in 52 weeks. In spite of this, the price is down -2.48% from the 52-week high.

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Insider Transactions

147 days have passed since Avis Budget Group Inc. (CAR) last reported insider trading activity. KROMINGA LYNN, who is Director, most recently acquired $5,760 shares at $83.50 per share on May 14. In this transaction, the insider spent $480,960. EVP, Chief HR Officer, Linnen Edward P, disposed of 8,300 shares at a price of $62.49 on Mar 05. The insider now owns more than $518,667 worth of shares.

Valuation Metrics

Avis Budget Group Inc. (CAR) has a trailing price-to-earnings (P/E) ratio of 49.53, which compares with the 22.10 for the broader industry and 28.71 for the sector. This means investors are optimistic about the stock’s future prospects. In the last five years, Avis Budget Group Inc.’s PE ratio has ranged between 53.39 and 1.940. The stock’s beta is 2.13. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 1.21, the price-to-book (PB) ratio at 95.80, and the price-to-cash flow ratio at 5.24.

The company has a payout ratio of 0.00%. The company’s most recent quarterly dividend payment was $0.1070 a share, without any change from last year.

The quick ratio of Avis Budget Group Inc. for the three months ended June 29 was 1.10, and the current ratio was 1.10, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 159.62 and a total debt to equity ratio of 159.85 For the recent quarter ending June 29. On the profitability front, the trailing 12-month gross margin is 48.10% against a 5-year average of 75.9%. Avis Budget Group Inc.’s EBITDA margin for the year ending June 29 is 41.91%, while its operating margin for the same period stands at 7.10%. Its gross profit as reported stood at $2.08 billion compared to revenue of $5.4 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Avis Budget Group Inc.’s return on assets was 0.90%, compared to 0.4% over the last five years. In the past year, the return on investment has been -2.70%, and the 5-year average is 2.9%. Meanwhile, the return on equity (ROE) for the past 12 months has been -160.90% and the 5-year average holds at -8.6%.

Earnings Surprise

In the quarter under review, the net income was up than the previous quarter. The company posted a net income of $2.37 billion in the quarter, while revenues of $1.37 billion were grew 67.95%. The analyst consensus anticipated Avis Budget Group Inc.’s latest quarter earnings to come in at $1.21 per share, but it turned out to be $5.9, a 387.60% surprise. For the recent quarter, EBITDA amounted to $1.31 billion. Shareholders own equity worth $66.54 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Avis Budget Group Inc. (CAR) price momentum. RSI 9-day as of the close on 07 October was 74.44%, suggesting the stock is Overbought, with historical volatility in this time frame at 53.15%.

As of today, CAR’s price is $125.33 +8.53% or $9.94 from its 5-day moving average. CAR is currently trading +38.45% higher than its 20-day SMA and +43.60% higher than its 100-day SMA. However, the stock’s current price level is +55.04% above the SMA50 and +257.00% above the SMA200.

The stochastic %K and %D were 94.89% and 95.51%, respectively, and the average true range (ATR) was 6.04. With the 14-day stochastic at 87.79% and the average true range at 5.82, the RSI (14) stands at 72.82%. The stock has reached 5.55 on the 9-day MACD Oscillator while the 14-day reading was at 12.92.

Analyst Ratings

BofA Securities upgraded Avis Budget Group Inc. (NASDAQ: CAR) to a a Buy rating in its most recent analyst report. Previously, the stock was rated as a a Neutral.The consensus rating for Avis Budget Group Inc. (CAR) among analysts is Overweight. According to current brokerage recommendations, 0 brokerage firms advise that investors sell CAR, while 4 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 0 analysts, while 4 others rate it as a “buy”.

What is CAR’s price target for the next 12 months?

Analysts predict a range of price targets between $77.00 and $125.00, with a median target of $100.00. Taking a look at these predictions, the average price target given by analysts for Avis Budget Group Inc. (CAR) stock is $99.14.


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