CAR - Embedded Expectations Analysis - 2018 06 06
Avis Budget Group (CAR:USA) is currently trading near historical averages relative to UAFRS-based (Uniform) Assets, with a 1.5x Uniform P/B. At these levels, the market has bullish expectations for the firm, but management has concerns about productivity, pricing, and volumesSpecifically, management may be concerned about SRS Investment Management intending to nominate five candidates to the board at their upcoming annual meeting, and may lack confidence in the sustainability of productivity improvements. Furthermore, they may be exaggerating their satisfaction with their financial rebound in the second half of the year, and may be overstating the impact that their Demand Fleet Pricing system had during the strong Thanksgiving and Christmas season. Moreover, they may be concerned about their expectation for relatively weak pricing, and may lack confidence in the sustainability of leisure volume improvements
Avis Budget Group is a provider of mobility solutions through its three brands, Avis, Budget and Zipcar, together with several other brands. The company has two segments: Americas, which provides and licenses the company's brands to third parties for vehicle rentals and ancillary products and services in North America, South America, Central America and the Caribbean, and operates its car sharing business in certain of these markets; and International, which provides and licenses the company's brands to third parties for vehicle rentals and ancillary products and services in Europe, the Middle East, Africa, Asia and Australasia, and operates the company's car sharing business in certain of these markets.
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
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