Reasons Why You Should Retain Avis Budget Stock in Your Portfolio

Avis Budget Group CAR has a Growth Score of A, which condenses key financial metrics to reflect a fair sense of the quality and sustainability of its growth.

The company’s fourth-quarter 2025 revenues and earnings are expected to increase around 2% and 48% year over year, respectively.

Factors That Bode Well for CAR

CAR’s revenue growth is primarily driven by its vehicle rental operations. It enjoys a large share of airport car rental revenues in North America, Europe and Australasia. The company’s Zipcar brand operates a self-service, car-sharing model, enabling users to reserve and drive vehicles for short periods as an alternative to service providers like Uber and Lyft, which connect passengers with drivers. Growing demand for short-term car rentals, which provide access rather than ownership, supports the company’s growth.

Avis Budget Group, Inc. Revenue (TTM)

Avis Budget Group, Inc. revenue-ttm | Avis Budget Group, Inc. Quote

The company has enhanced fleet utilization, cost control and operational efficiency to meet customers' demands. Acquisitions of vehicles at favorable prices, reduced supply chain disruptions and improved rental services have collectively bolstered its profitability. The recent launch of Avis First, a luxury car rental service, is aimed at attracting premium customers.

CAR’s continuous investment in technology enhances customer experience. Partnerships with Alphabet and Amazon enable voice-controlled access via Google Assistant and Amazon Alexa devices, respectively, adding convenience for users. This focus also extends the capabilities of vehicles connected to the Avis mobile app, generating data on road conditions, accident zones, weather and user preferences.

CAR consistently returns value to shareholders through robust share repurchase programs. The company bought back shares worth $1.46 billion, $3.33 billion, $951 million and $70 million in 2021, 2022, 2023 and 2024, respectively. Such moves instill shareholder confidence in its stock and generate growth.

A Risk

CAR had a current ratio of 0.71 in the third quarter of 2025, lower than the industry's average of 1.94. A current ratio below 1 often suggests that a company may not be well-positioned to meet its short-term obligations.

Zacks Rank & Stocks to Consider

CAR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

A couple of better-ranked stocks in the broader Zacks Transportation sector are Ryanair Holdings Plc RYAAY and LATAM Airlines Group LTM.

Ryanair currently carries a Zacks Rank #2 (Buy). RYAAY has a long-term earnings growth expectation of 20.3%. The company delivered a trailing four-quarter earnings surprise of 63% on average.

LATAM Airlines also holds a Zacks Rank of 2 at present, with a long-term earnings growth expectation of 24.6%. LTM beat earnings estimates in three of the last four quarters and matched once, with an average surprise of 29.8%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research