Avis Budget Group, Inc. (CAR) Fundamental Analysis: Bull vs. Bear Case

CAR

Avis Budget Group, Inc.

Fundamental data last updated:June 19, 2026

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company profile

SECTOR

Industrials

industry

Rental & Leasing Services

Exchange

NASDAQ

County of HQ

US

Next Earnings Date

08/04/2026

Business Summary

Avis Budget Group, Inc., together with its subsidiaries, provides car and truck rentals, car sharing, and ancillary products and services to businesses and consumers. It operates the Avis brand, that offers vehicle rental and other mobility solutions to the premium commercial and leisure segments of the travel industry; the Budget Truck brand, a local, and one-way truck and cargo van rental businesses with a fleet of approximately 20,000 vehicles, which are rented through a network of approximately 465 dealer-operated and 385 company-operated locations that serve the consumer and light commercial sectors in the continental United States; and the Zipcar brand, a car sharing network. The company also operates various other car rental brands, such as Budget, Payless, Apex, Maggiore, MoriniRent, FranceCars, Amicoblue, Turiscar, and ACL Hire. In addition, it offers optional insurance products and coverages, such as supplemental liability, personal accident, personal effects protection, emergency sickness protection, and automobile towing protection and cargo insurance products; fuel service options, roadside assistance services, electronic toll collection services, curbside delivery, tablet rentals, access to satellite radio, portable navigation units, and child safety seat rentals; automobile towing equipment and other moving accessories, such as hand trucks, furniture pads, and moving supplies; and Business Intelligence solution, an online portal for corporate travel. Avis Budget Group, Inc. operates in approximately 10,400 locations worldwide. The company was formerly known as Cendant Corporation and changed its name to Avis Budget Group, Inc. in September 2006. Avis Budget Group, Inc. was founded in 1946 and is headquartered in Parsippany, New Jersey.

VALUATION

P/E

-9.31

Market Cap ($M USD)

$6.21B

Forward P/E

18.37 PEG

0.12 PRICE TO SALES

0.53 PRICE TO BOOK

-1.82

EV / EBITDA

6.30 5-Year Average P/E

Free Cash Flow Yield

-24.66%

DCF Value

$-2195.33

Graham Number

N/A

Price to FCF

-4.05

EV to FCF

-21.77

Earnings Yield

-10.75%

FCF Yield

-24.66%

DIVIDEND

Yield

0.00%

Annual Payout

$0.00

Payout Ratio

0.00%

Consecutive Years of Dividend Growth

5-Year Dividend Growth Rate

Financial Health & Profitability

Earnings Per Share

-$18.90

Next Year EPS Growth Estimate

$9.57

Next Year Revenue Growth Estimate

$1.25T

Return on Equity (ROE)

22.83%

FREE CASH FLOW

Operating Margin

11.20%

Debt-to-Equity

-9.96

Piotroski F-Score

4 Altman Z-Score

0.64 Return on Invested Capital (ROIC)

4.76%

Current Ratio

0.74 Quick Ratio

0.74 Net Debt to EBITDA

5.13 Interest Coverage

0.92 Gross Profit margin

25.59%

FCF PER SHARE

$-43.40

REVENUE PER SHARE

$332.92

Gainseekers Quantitative Analysis

Summary

Avis Budget Group, Inc. presents a perplexing valuation scenario. The market appears to be mispricing the stock significantly below its DCF value, suggesting potential undervaluation. However, the negative Price/Book ratio and alarming Altman Z-score of 0.63 indicate financial distress, raising red flags about its long-term viability. Despite a forward P/E of 15.23, which suggests some optimism for future earnings, the negative earnings yield and high net debt to EBITDA ratio underscore substantial risk. This is a company on a precarious financial footing, with the market’s expectations seemingly at odds with its underlying fundamentals.

AI Exposure / Tech Reliance

Operating within the Industrials sector, Avis Budget Group is positioned to leverage AI and tech advancements to optimize fleet management and enhance customer experience. As a player in the Rental & Leasing Services industry, integrating AI could streamline operations and reduce costs. However, the capital-intensive nature of the business may limit rapid tech adoption compared to more agile tech-centric firms.

The Bull Case

For the value or GARP investor, Avis Budget Group offers a compelling narrative of potential turnaround. The company boasts a respectable ROIC of 4.76%, indicating efficient capital use, and an operating margin of 11.20%, reflecting solid pricing power. Despite a Piotroski F-Score of 4, which suggests moderate financial health, the forward PEG ratio of 0.10 signals significant undervaluation relative to growth expectations. These metrics suggest that, if management can navigate current challenges, there is room for substantial upside.

The Bear Case

The bear case for Avis Budget Group is stark. The negative Price/Book ratio and a deeply concerning Altman Z-score highlight structural vulnerabilities. The company's cash flow situation is dire, with a negative FCF yield and an EV to FCF ratio of -21.08, indicating poor cash generation. Additionally, trading significantly below its 50-Day SMA suggests technical weakness, while the high interest coverage ratio of 0.92 raises questions about its ability to service debt. These factors paint a picture of a company struggling to maintain financial stability.

Market Sentiment & Smart Money

Short Interest %

Analyst Consensus

Hold

Average Analyst Price Target

$124.83

Institutional Ownership %

1-Year Beta

1.90 Insider Buying % (6 Mo)

Distance to 52-Week High

382.09%

Distance to 52-Week Low

51.11%

EARNINGS SURPRISE %

-17.45%

50-DAY SMA

$220.83

200-DAY SMA

$155.74

⚠️ Financial Disclaimer:
This content is for informational purposes only and is not financial advice. Information may be delayed or inaccurate. We may earn a commission from partner links.