Avis Budget Group, Inc. (CAR), a company providing car and truck rentals, car sharing, and ancillary services to businesses and consumers, has increased 6.67% in aftermarket trading session and consequently, was changing hands at $182.90 at the time of the writing. The increase could be attributed to the announcement of quarterly results by the company. On Monday, CAR closed the day at $171.46 after declining 1.07% during regular trading hours.
Q3 2021 financial highlights
In the late hours of Monday, CAR reported the financial results for the third quarter of the fiscal year 2021. The quarter ended on 30th September 2021. The company generated total revenue of $3.001 billion during the quarter against $1.53 billion for the same period of 2020. The net income generated by the company during the period was $674 million against $45 million for the same period of 2020. The company generated diluted earnings per share of $10.74 during the quarter against $0.63 for the same period of 2020. The company had cash and cash equivalents of $886 million on 30th September 2021.
Joe Ferraro, CAR Chief Executive Officer, while commenting on the company’s performance said that the quarterly results are a testament to the company’s ongoing focus around cost discipline and its ability to execute operationally. He said that the company looks to build on this positive momentum in the future.
Recommendation to sell CAR stock
On 14th October, CAR stock saw a steady drop of 2.5% after Morgan Stanley recommended investors to sell citing the reason that it was too early for the investors to be betting on the “mega-fleet bull case. Morgan Stanley analyst Billy Kovanis said that he just doesn’t buy that investors suddenly view car rental as a high return-on-invested-capital (ROIC) business in the long run. Besides, the pricing, which has got a boost from recently increased travel, will be permanently higher.
What’s ahead for CAR?
Looking back, during the last three months, CAR stock has surged more than 90% on the back of excellent quarterly results. Estimates suggest that a continued focus on the growth strategy by the company could yield numerous dividends in the upcoming quarters as well. Also, the subsiding effects of the pandemic could provide a major booster for CAR.