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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Avis Budget Group (CAR) ten years ago? It may not have been easy to hold on to CAR for all that time, but if you did, how much would your investment be worth today?
Avis Budget Group's Business In-Depth
With that in mind, let's take a look at Avis Budget Group's main business drivers.
Headquartered in Parsippany, N.J., Avis Budget Group operates as a leading vehicle rental operator in North America, Europe and Australasia with an average rental fleet of nearly 650,000 vehicles. The company is a leading global provider of mobility solutions through its three most recognized brands — Avis, Budget and Zipcar. The company has licensees in approximately 175 countries throughout the world.
Along with its licensees, Avis Budget operates in approximately 180 countries with more than 11,000 car and truck rental locations throughout the world.The company usually maintains a leading share of airport car rental revenue in North America, Europe and Australasia, and operates one of the leading truck rental businesses in the United States. Its Zipcar brand is one of the world’s leading car sharing businesses which provides an alternative to traditional vehicle rental and ownership.
Avis Budget mainly generates revenues from vehicle rental operations. These include time & mileage fees charged to our customers for vehicle rentals; sales of loss damage waivers and insurance and other supplemental items in conjunction with vehicle rentals; and payments from customers with respect to certain operating expenses incurred, including gasoline, vehicle licensing fees and concession fees, which provide the right to operate at airports and other locations. Additionally, the company earns revenues for royalties and associated fees from its licensees in conjunction with their vehicle rental transactions.
The company reports its operating results under two segments:
Americas: This segment (69% of 2020 revenues) consists of vehicle rental operations in North America, South America, Central America and the Caribbean, car sharing operations in certain of these markets, and licensees in the areas in which the company does not operate directly.
International: This segment (31%) consists of the company’s vehicle rental operations in Europe, the Middle East, Africa, Asia and Australasia, car sharing operations in certain of these markets, and licensees in the areas in which the company does not operate directly.
As of Dec 31, 2020, Avis Budget employed approximately 30,000 worldwide.
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Avis Budget Group a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in August 2011 would be worth $6,099.36, or a gain of 509.94%, as of August 3, 2021, and this return excludes dividends but includes price increases.
The S&P 500 rose 249.84% and the price of gold increased 5.03% over the same time frame in comparison.
Going forward, analysts are expecting more upside for CAR.
Avis Budget's ability to cater to a wide range of mobility demands helps it expand and strengthen global foothold through organic growth. It operates through distinct global brands that focus on different market segments and complement other brands in their respective regional markets. The company’s fleet expansion and technology enhancement initiatives are likely to enhance its offerings. Partly due to these positives, the stock price has increased over the past year. However, the company faces intense competition from other players in terms of pricing in the vehicle rental industry. Pricing pressure in the international business is weighing on the company's revenue per day. The company's rental business experiences seasonal variations. The company has no plan to pay cash dividends on common stock. High debt remains a concern.
The stock is up 8.87% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 2 higher, for fiscal 2021. The consensus estimate has moved up as well.
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Avis Budget Group, Inc. (CAR) : Free Stock Analysis Report
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