CAR

Avis Budget Group Inc.

Consumer


Presented:09/09/2014
Price:$63.88
Cap:$6.65B
Current Price:$77.47
Cap:$2.76B

Presented

Date09/09/2014
Price$63.88
Market Cap$6.65B
Ent Value$20.35B
P/E Ratio6.29x
Book Value$27.29
Div YieldN/A
Shares O/S104.04M
Ave Daily Vol1,410,000
Short Int12.70%

Current

Price$77.47
Market Cap$2.76B
Avis Budget Group, Inc., together with its subsidiaries, provides car and truck rentals, car sharing, and ancillary services to businesses and consumers worldwide. The company has three segments: North America, International, and Truck Rental. It operates the Avis car rental system with approximately 5,450 locations, that supply rental cars to the premium commercial and leisure segments of the travel industry; the Budget vehicle rental system with approximately 3,350 car rental locations, which serve the value-conscious segments of the industry; Zipcar, a membership-based car sharing network that provides vehicles to approximately 860,000 members; and the Payless brand, which comprises approximately 125 vehicle rental locations, as well as operates Apex brand primarily in the deep-value segment of the car rental industry with approximately 19 rental locations. The company also operates local and one-way truck rental businesses with a fleet of approximately 23,000 trucks, which are rented through a network of approximately 1,300 dealers and 350 company-operated locations that serve the consumer and light commercial sectors. In addition, it provides a range of optional insurance products and coverages, such as supplemental liability insurance, personal accident insurance, personal effects protection, physical damage waivers, automobile towing protection, and cargo insurance. Avis Budget Group, Inc. was founded in 1946 and is headquartered in Parsippany, New Jersey.

Publicly traded companies mentioned herein: Avis Budget Group, Inc. (CAR), Hertz Global Holdings, Inc. (HTZ)

Highlights

The car rental industry has finally consolidated down to three major players with roughly 95% market share, and while the presenter is long shares of both Avis Budget Group (CAR) and Hertz (HTZ), his presentation focused on CAR. With leverage pegged and incremental cash flow allocated appropriately, he sees the potential for EBITDA to grow quickly via what he characterized as “a spiraling up effect” that could help the company outperform Street expectations over the next 12-24 months.

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Idea Discussion

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