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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Avis Budget Group, Inc. (XNAS:CAR) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CAR
Name:
AVIS BUDGET GROUP, INC. (XNAS:CAR)
Sector:
- 1616000.00K
Industry:
Rental & Leasing Services
CEO:
Mr. Joseph Ferraro
Total Employees:
21,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -116.46% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF AVIS BUDGET GROUP, INC.(CAR) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND RENTAL & LEASING SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
161.73
One Month Price Target:
$163.67
Six Month Price Target :
$173.38
Likely Price in One Year's Time:
Ticker:
$185.03
Likely Trading Range Today Under (Normal Volatility)
$160.5
Price Upper limit ($) :
$164.43
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$138.68
This week:
$110.19
This month :
$58.65
Other Primary facts
Market Cap:
7.45B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
48.07M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
108.31%
-35.97%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$268.49
$218.29
$54.97
$105.17
Medium risk (<10%) entry points
Buy Call
Sell Call
$201.95
Buy Put:
Sell Put:
$191.23
$121.37
$132.23
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CAR
Sharpe Ratio:
6.24%
Comparison:
CAR, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 108.19% higher than the industry
& ratio is 173.82% higher than the market/S&P 500 average
Average Returns/Yield of
CAR
Daily returns:
0.46%
Weekly returns:
2.28%
Monthly returns:
9.12%
Yearly returns:
31.25%
Comparison of returns:
Average annual returns/yield (last 3 years) is 250.06% above industry average
Classification:
CAR, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.38
Statistical test of Returns:
CAR has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
7.16%
Weekly Volatility:
16.01%
Monthly Volatility:
32.03%
Yearly Volatility:
110.94%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.31%
Volatility in last five trading days has been -81.75% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-14.25%
Weekly VaR:
-31.87%
Monthly VaR:
-63.73%
How Much Can the price of
CAR
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-51%
Worst case (decline):
>85%
This translates to price declining to:
$79.06
This translates to price declining to:
$24.26
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
CAR is a 349.83% riskier investment compared to the market/S&P 500 & is 285.37% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 94.48% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CAR
Beta in relation to market/S&P 500--2.14
Expected beta in 1 year's time:
1.32
Expected beta in 3 year's time:
1.867
Unlevered (debt free) Beta:
-0.164
Beta in relation to Nasdaq (XNAS):
1.478
Beta in relation to all global stocks::
1.294
Beta Comparison & Analysis
Beta of competitors/peers::
1.353
Beta is 58.43% higher than peers
Average Industry Beta:
1.628
Beta is 31.66% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.916
Alpha is 440.27% above industry average alpha yield
Alpha is 5828% higher than market/& is unsustainably high
Analysis of Cost of Capital of
CAR
Equity cost of capital:
0.178
Equity cost of capital is 24.69% above industry mean WACC
Unlevered (without debt) cost of capital:
-1.36%
Before-tax cost of debt:
2.33%
After-tax cost of debt:
1.84%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.84%
WACC is -37.68% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$215.81
Revenue growth rate per share of (3Y):
-7.91
Annual revenue growth rate is 3.13% above the industry average
EPS:
$32.31
Expected Annual growth rate of EPS (3Y):
69.25%
Expected future EPS growth rate is 499.83% higher than the Rental & Leasing Services industry
Free cash flow (FCF) per share:
-
-
-
Debt per share
$388.94
EBITDA per share
$117.65
Valuation Analysis Today of
CAR
P/E Ratio:
3.91
P/E Ratio of Competitors/Peers:
17.03
P/E ratio is -77.06% lower than main peers & is -78.34% lower than the industry
Stock price/value with industry average P/E ratio: $582.54
CAR is -72.24% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.75
Price to sales ratio is -60.20% below the industry mean
P/B (Price to book value ratio):
-7.91
-
Price to free cash flow ratio is -84.88% lower than the industry
Net income growth rate (3Y):
851.59%
Net income growth rate is 273.73% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
-1884.58%
Net debt to equity ratio:
-1885.89%
Debt to assets ratio:
79.31%
Net debt to assets ratio:
79.36%
Debt-to-asset ratio is 5.93% above industry average
Ability to repay debt:
Interest coverage ratio:
12.62
Interest coverage ratio is -131.75% less than industry average
Looking forward:
Debt growth rate:
30.35%
Annual debt growth is 45% higher than industry average debt growth rate
Debt repayment rate in last quarter: 15.42%
Analysis of Key Statistics
Correlation of price movement with the market:
0.425
Statistical significance of correlation:
CAR has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.547
Stock price is -22.32% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.547
Correlation of price movement with Nasdaq (^IXIC):
0.036
Covariance of price movement with the market:
0.149
Kurtosis
76.33
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
5.091
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
CAR
Gross Profit Margin Ratio:
332%
Operating Profit Margin Ratio:
24.57%
Operating profit margin is 152.29% higher than the industry
Net Profit Margin Ratio:
332%
Effective Tax Rate:
25.37%
Effective tax rate is 11.57% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-200.00%
Return on equity (ROE) is 316.91% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
8.42%
Return on assets (ROA) is 114.06% higher than the industry
Financial Leverage:
4.8x
Current Ratio:
0.65
Current ratio is -48.69% below industry average
Cash Conversion Cycle (days):
30.4
Cash conversion cycle is 38.07% above industry average
The remaining useful life of property plant & equipment is: 19.4 years
Stock based compensation to net income ratio:
0.30%
In-depth Efficiency Analysis
Revenue generated per employee:
494.0K
Each employee generates -78% less revenue than industry average revenue per employee
EBITDA generated per employee:
269.3K
Each employee generates -100% less EBITDA than industry average revenue per employee
Profit generated per employee:
94.5K
Each employee generates -100% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 77.0K
Each employee generates -136% less free cash flow than industry average revenue per employee
Assets/Capital per employee
1.0M
Each employee generates -136% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
CAR
HERTZ GLOBAL HOLDINGS, INC. (XNAS:HTZ)
THE MIDDLEBY CORPORATION (XNAS:MIDD)
RILYI
FIRST INTERNET BANCORP (XNAS:INBKZ)
AMERICAN AIRLINES GROUP INC. (XNAS:AAL)
WILLSCOT MOBILE MINI HOLDINGS CORP. (XNAS:WSC)
AMERCO (XNAS:UHAL)
NORDSON CORPORATION (XNAS:NDSN)
LINCOLN ELECTRIC HOLDINGS, INC. (XNAS:LECO)
Current Analyst Ratings
Strong buy�8%
Buy�21%
Hold�13%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
10.37B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
1.75B
8.63B
-
361.00M
1.25B
-
4.83B
6.08B
-
448.00M
2.55B
5.66B
2.55B
1.98B
2.65B
673.00M
1.98B
Statement of Cash Flow
Date:
Period:
633.00M
Differed Income Tax :
-
Stock Based Compensation :
6.00M
Change in Working Capital :
275.00M
Accounts Receivables:
9.00M
Other Working Capital:
-
Other Non-Cash Items:
- 293000.00K
Net Cash Provided by Operating Activities:
1.15B
Investments in PP&E:
- 2764000.00K
Net Acquisitions:
-
Purchases of Investments:
- 84000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
550.00M
-
550.00M
885.00M
-
333.00M
1.77B
16.76B
1.10B
706.00M
882.00M
1.54B
820.00M
21.81B
-
23.57B
513.00M
563.00M
-
322.00M
1.30B
2.70B
18.70B
836.00M
21.85B
-
24.56B
1.00M
344.00M
- 94000.0K
- 1243000.00K
March 31, 2022 at 6:00:00 AM
7.82B
- 992000.00K
23.56B
-
19.26B
18.7B
44.00M
1.64B
- 1165000.00K
- 3408000.00K
-
- 1299000.00K
-
4.74B
30.00M
- 2000.00K
11.00M
637.00M
626.00M
1.15B
- 2764000.00K
- 1616000.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
CAR
2023
2024
2025
2026
2027
$185.96
$459.71
$525.93
$601.69
$688.36