Avis Budget Group Reports Q4 2025 Earnings Miss Amid Demand Drop
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy CAR?
Source: seekingalpha
- Earnings Miss: Avis Budget Group reported an adjusted EBITDA of $748 million for Q4 2025, falling short of guidance by approximately $150 million, primarily due to a sharp decline in demand within the Americas segment.
- Strategic Shift: CEO Brian Choi emphasized a strategic pivot towards prioritizing utilization over fleet growth, indicating that a tighter fleet management approach will be implemented in 2026 to navigate market volatility and enhance profitability.
- Asset Write-Down: The company announced a $500 million write-down on its EV fleet, aimed at strengthening its balance sheet and reducing future risks, while also generating $180 million in cash through monetizing federal EV tax credits.
- Increased Market Risks: Management highlighted significant challenges from industry demand volatility, pricing pressures, and the grounding of 14,000 vehicles due to recalls, which are expected to continue impacting financial performance in the upcoming quarters.
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Analyst Views on CAR
Wall Street analysts forecast CAR stock price to rise
1 Analyst Rating
0 Buy
1 Hold
0 Sell
Hold
Current: 123.300
Low
142.00
Averages
142.00
High
142.00
Current: 123.300
Low
142.00
Averages
142.00
High
142.00
About CAR
Avis Budget Group, Inc. is a provider of mobility solutions through its three brands, Avis, Budget and Zipcar, as well as several other brands. Its brands offer a range of options, from car and truck rental to car sharing. Its segments include Americas and International. The Americas segment consists primarily of vehicle rental operations in North America, South America, Central America and the Caribbean and operates car-sharing operations in certain of these markets. The International segment consists of vehicle rental operations in Europe, the Middle East, Africa, Asia and Australasia, and operates car-sharing operations in certain of these markets. The Avis brand provides vehicle rental and other mobility solutions at price points generally above non-branded and value-branded vehicle rental companies and serves the premium commercial and leisure segments of the travel industry. Its other brands include Payless, Apex, AmicoBlu, Maggiore, Morini Rent, FranceCars, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Avis Budget Group's Q4 Results Fall Short of Expectations
- Sales Decline: Avis Budget Group reported a 0.4% year-over-year drop in Q4 sales to $2.7 billion, falling short of market expectations, reflecting a 1% decrease in rental days that intensified challenges during the company's repositioning efforts.
- Narrowed Losses: The company's net loss decreased by 56% to $856 million, translating to a per-share loss of $21.25, which still significantly exceeded expectations of a $0.38 loss per share, indicating improved profitability but undermined market confidence.
- Operational Efficiency Gains: Adjusted EBITDA in the Americas improved to $1 million from a loss of $63 million last year, despite a 4% decline in revenue per day, showcasing the company's efforts to enhance operational efficiency through reduced fleet costs.
- Utilization Rate Improvement: Combined vehicle utilization in the Americas and International markets rose by 30 basis points to 68.0%, while monthly per unit fleet costs decreased by 18%, indicating that the company's strategic adjustments are gradually yielding positive results.
See More
Significant Stock Movements Among Multiple Companies
- Klarna Guidance Miss: Klarna's shares plummeted about 25% as its first-quarter operating income guidance of $5 million to $35 million fell significantly short of Wall Street's expectation of $61.9 million, indicating potential challenges in future financing capabilities.
- Blue Owl Loan Sale: Blue Owl Capital's stock dropped nearly 10% after announcing the sale of $1.4 billion in loans at 99.7% of par value, with proceeds aimed at debt repayment and capital return, highlighting liquidity pressures and a halt on redemptions for retail investors.
- Omnicom Buyback Plan: Omnicom's shares surged 13% after reporting fourth-quarter revenue of $5.5 billion, a nearly 28% year-over-year increase, alongside a $5 billion share buyback authorization, reflecting strong financial performance and confidence in future growth.
- Deere Earnings Beat: Deere's stock rose 13% as it reported first-quarter earnings of $2.42 per share on $8 billion in revenue, both exceeding analyst expectations, indicating robust demand for agricultural equipment and potential market share growth ahead.
See More
Avis Budget Group Reports Q4 2025 Earnings Miss Amid Demand Drop
- Earnings Miss: Avis Budget Group reported an adjusted EBITDA of $748 million for Q4 2025, falling short of guidance by approximately $150 million, primarily due to a sharp decline in demand within the Americas segment.
- Strategic Shift: CEO Brian Choi emphasized a strategic pivot towards prioritizing utilization over fleet growth, indicating that a tighter fleet management approach will be implemented in 2026 to navigate market volatility and enhance profitability.
- Asset Write-Down: The company announced a $500 million write-down on its EV fleet, aimed at strengthening its balance sheet and reducing future risks, while also generating $180 million in cash through monetizing federal EV tax credits.
- Increased Market Risks: Management highlighted significant challenges from industry demand volatility, pricing pressures, and the grounding of 14,000 vehicles due to recalls, which are expected to continue impacting financial performance in the upcoming quarters.
See More
Avis Budget Group Reports Q4 Losses, Stock Drops 21%
- Earnings Miss: Avis Budget Group reported a staggering loss of $21.25 per share in its Q4 earnings, with sales falling short of the $2.7 billion expectation, resulting in a 21% drop in stock price during early trading, highlighting significant challenges in its electric vehicle rental segment.
- Impairment Charges: The company recorded $518 million in long-lived asset impairment and related charges, which accounted for 60% of the quarterly losses, exacerbating its financial troubles and indicating potential issues with its EV fleet.
- Market Outlook: Despite the current financial setbacks, analysts forecast that Avis will return to profitability in 2025, with an expected earnings per share of $9.66, suggesting a degree of optimism regarding the company's future earnings potential.
- Investment Opportunity: With shares priced at $97 and a forward P/E ratio of only 10, investors willing to take risks may find an attractive buying opportunity, especially as the company recalibrates its electric vehicle strategy.
See More
Walmart's Fiscal Outlook Falls Short of Expectations
- Walmart's Fiscal Outlook: Walmart anticipates net sales growth of only 3.5% to 4.5% and adjusted earnings per share of $2.75 to $2.85, falling short of analysts' expectations of $2.96, resulting in a 3.7% drop in stock price, reflecting market concerns about future growth.
- Hims & Hers Acquisition: Hims & Hers Health announced its acquisition of Australian digital health company Eucalyptus for up to $1.15 billion, leading to a nearly 7% increase in stock price, indicating a proactive strategy in expanding market presence and service offerings.
- Deere Earnings Beat: Deere reported first-quarter earnings of $2.42 per share on revenues of $8 billion, exceeding analyst expectations, which drove a 5.3% increase in stock price, showcasing its strong performance and profitability in the agricultural equipment sector.
- DoorDash Order Growth: DoorDash reported a 32% year-over-year increase in total orders for the fourth quarter, and despite missing overall earnings estimates, the stock surged 10%, highlighting its growth potential in the competitive food delivery market.
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Stock Movers: Carvana, DoorDash, Figma, Etsy, eBay, Walmart, and Others
- Stock Market Outlook: Stock futures are indicating a downward trend on Thursday.
- Investor Concerns: Investors are closely monitoring the rise in oil prices.
- Geopolitical Tensions: The increase in oil prices is linked to ongoing tensions with Iran.
- Market Reactions: The combination of these factors is influencing investor sentiment and market performance.
See More
Avis Budget Group's Q4 Results Fall Short of Expectations
- Sales Decline: Avis Budget Group reported a 0.4% year-over-year drop in Q4 sales to $2.7 billion, falling short of market expectations, reflecting a 1% decrease in rental days that intensified challenges during the company's repositioning efforts.
- Narrowed Losses: The company's net loss decreased by 56% to $856 million, translating to a per-share loss of $21.25, which still significantly exceeded expectations of a $0.38 loss per share, indicating improved profitability but undermined market confidence.
- Operational Efficiency Gains: Adjusted EBITDA in the Americas improved to $1 million from a loss of $63 million last year, despite a 4% decline in revenue per day, showcasing the company's efforts to enhance operational efficiency through reduced fleet costs.
- Utilization Rate Improvement: Combined vehicle utilization in the Americas and International markets rose by 30 basis points to 68.0%, while monthly per unit fleet costs decreased by 18%, indicating that the company's strategic adjustments are gradually yielding positive results.
See More
Significant Stock Movements Among Multiple Companies
- Klarna Guidance Miss: Klarna's shares plummeted about 25% as its first-quarter operating income guidance of $5 million to $35 million fell significantly short of Wall Street's expectation of $61.9 million, indicating potential challenges in future financing capabilities.
- Blue Owl Loan Sale: Blue Owl Capital's stock dropped nearly 10% after announcing the sale of $1.4 billion in loans at 99.7% of par value, with proceeds aimed at debt repayment and capital return, highlighting liquidity pressures and a halt on redemptions for retail investors.
- Omnicom Buyback Plan: Omnicom's shares surged 13% after reporting fourth-quarter revenue of $5.5 billion, a nearly 28% year-over-year increase, alongside a $5 billion share buyback authorization, reflecting strong financial performance and confidence in future growth.
- Deere Earnings Beat: Deere's stock rose 13% as it reported first-quarter earnings of $2.42 per share on $8 billion in revenue, both exceeding analyst expectations, indicating robust demand for agricultural equipment and potential market share growth ahead.
See More
Avis Budget Group Reports Q4 2025 Earnings Miss Amid Demand Drop
- Earnings Miss: Avis Budget Group reported an adjusted EBITDA of $748 million for Q4 2025, falling short of guidance by approximately $150 million, primarily due to a sharp decline in demand within the Americas segment.
- Strategic Shift: CEO Brian Choi emphasized a strategic pivot towards prioritizing utilization over fleet growth, indicating that a tighter fleet management approach will be implemented in 2026 to navigate market volatility and enhance profitability.
- Asset Write-Down: The company announced a $500 million write-down on its EV fleet, aimed at strengthening its balance sheet and reducing future risks, while also generating $180 million in cash through monetizing federal EV tax credits.
- Increased Market Risks: Management highlighted significant challenges from industry demand volatility, pricing pressures, and the grounding of 14,000 vehicles due to recalls, which are expected to continue impacting financial performance in the upcoming quarters.
See More
Avis Budget Group Reports Q4 Losses, Stock Drops 21%
- Earnings Miss: Avis Budget Group reported a staggering loss of $21.25 per share in its Q4 earnings, with sales falling short of the $2.7 billion expectation, resulting in a 21% drop in stock price during early trading, highlighting significant challenges in its electric vehicle rental segment.
- Impairment Charges: The company recorded $518 million in long-lived asset impairment and related charges, which accounted for 60% of the quarterly losses, exacerbating its financial troubles and indicating potential issues with its EV fleet.
- Market Outlook: Despite the current financial setbacks, analysts forecast that Avis will return to profitability in 2025, with an expected earnings per share of $9.66, suggesting a degree of optimism regarding the company's future earnings potential.
- Investment Opportunity: With shares priced at $97 and a forward P/E ratio of only 10, investors willing to take risks may find an attractive buying opportunity, especially as the company recalibrates its electric vehicle strategy.
See More
Walmart's Fiscal Outlook Falls Short of Expectations
- Walmart's Fiscal Outlook: Walmart anticipates net sales growth of only 3.5% to 4.5% and adjusted earnings per share of $2.75 to $2.85, falling short of analysts' expectations of $2.96, resulting in a 3.7% drop in stock price, reflecting market concerns about future growth.
- Hims & Hers Acquisition: Hims & Hers Health announced its acquisition of Australian digital health company Eucalyptus for up to $1.15 billion, leading to a nearly 7% increase in stock price, indicating a proactive strategy in expanding market presence and service offerings.
- Deere Earnings Beat: Deere reported first-quarter earnings of $2.42 per share on revenues of $8 billion, exceeding analyst expectations, which drove a 5.3% increase in stock price, showcasing its strong performance and profitability in the agricultural equipment sector.
- DoorDash Order Growth: DoorDash reported a 32% year-over-year increase in total orders for the fourth quarter, and despite missing overall earnings estimates, the stock surged 10%, highlighting its growth potential in the competitive food delivery market.
See More
Stock Movers: Carvana, DoorDash, Figma, Etsy, eBay, Walmart, and Others
- Stock Market Outlook: Stock futures are indicating a downward trend on Thursday.
- Investor Concerns: Investors are closely monitoring the rise in oil prices.
- Geopolitical Tensions: The increase in oil prices is linked to ongoing tensions with Iran.
- Market Reactions: The combination of these factors is influencing investor sentiment and market performance.
See More
