A month has gone by since the last earnings report for Avis Budget Group (CAR). Shares have added about 2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Avis Budget due for a pullback? 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 Surpasses Q3 Earnings & Revenues Estimates
Avis Budget reported better-than-expected third-quarter 2022 results wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings of $21.7 per share beat the Zacks Consensus Estimate by 46.6% and surged more than 100% year over year. Total revenues of $3.55 billion surpassed the consensus estimate by 0.7% and improved 18.2% year over year. The top line was backed by increased revenues per day and strong demand.
Revenues by Segment
Americas segment’s revenues of $2.7 billion were up 12% year over year. The segment contributed to 76.2% of total revenues.
International segment’s revenues of $844 million were up 41% year over year. The segment contributed to 23.8% of total revenues.
Adjusted EBITDA was at $1,460 million, up 38% year over year. Adjusted EBITDA margin was 41.2% compared with 35.2% in the year-ago quarter.
Adjusted EBITDA for Americas was $1,185 million, up 24% year over year. The uptick was backed by record demand.
Internationally, adjusted EBITDA was $291 million, up more than 100% year over year. The uptick was backed by strong pricing and return of demand.
Balance Sheet and Cash Flow
Avis Budget exited third-quarter 2022 with cash and cash equivalents of $581 million compared with $579 million at the end of the prior quarter. Corporate debt was $4.59 billion compared with $4.65 billion at the end of the prior quarter.
CAR generated $1.49 billion net cash from operating activities in the reported quarter. Adjusted free cash flow was $878 million, while capital expenditures were $62 million in the reported quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 8.19% due to these changes.
At this time, Avis Budget has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Avis Budget has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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