Pre-earnings brief
Reports
Mon, May 4, 2020
Est. EPS
—
Est. revenue
—
Implied move
±3.1%
EPS beat rate
13%
—
Est. EPS
—
Est. Rev
—
Impl. Move
—
Avis Budget Group, Inc. (CAR) is a leading provider of rental cars and related services in the passenger ground transportation sector. As travel demand rebounds post-pandemic, the company plays a crucial role in the mobility landscape, catering to both leisure and business travelers.
Last quarter
In Q2 2026, Avis Budget Group reported an EPS of $0.98, which was significantly lower than the expected $2.14, leading to a negative surprise. The stock reacted positively, gaining 1.61% the following day despite the disappointing earnings.
EPS beat streak
0Q
EPS beat rate
13%
Avg EPS surprise
-1651.19%
Avg 1-day reaction
-0.13%
Overall, the market is cautious ahead of the earnings report, especially given the company's recent history of missing earnings expectations. Investors are looking for signs of recovery in profitability and revenue.
Bull case
If the company can demonstrate strong revenue growth and improved fleet utilization, it could signal a robust recovery in travel demand, leading to a positive market reaction.
Bear case
Conversely, if the company continues to report losses or lower-than-expected revenue, it may raise concerns about its long-term viability in a competitive market.
Key metrics to watch
Earnings Per Share (EPS)
$2.14EPS is a key indicator of the company's profitability and financial health, which investors closely monitor.
Revenue Growth
N/ARevenue growth reflects the company's ability to increase sales and capture market share, especially as travel demand fluctuates.
The print will turn on these.
Q1
What will the EPS be for Q3-2026, and how does it compare to expectations?
Given the significant misses in recent quarters, the market will closely scrutinize EPS to gauge the company's recovery trajectory.
Q2
How has rental fleet utilization changed in the last quarter?
Improved fleet utilization is critical for revenue growth, and any positive commentary could boost investor confidence.
Why consensus could be wrong
The Street may underestimate the potential for a rebound in travel demand, especially as consumer spending on travel increases.
Supporting evidence
The options market is pricing a 24.25% move, indicating greater volatility than what has been realized historically.
Recent travel trends show a significant uptick in bookings, which could positively impact revenue.
Avis has a strong brand presence and customer loyalty, which may not be fully reflected in current market sentiment.
Key risk
If EPS exceeds $2.14, it could challenge the current bearish outlook and shift investor sentiment.
Pre-commit to what would confirm each case.
This quarter's performance is pivotal as it could either signal a turnaround or indicate ongoing struggles in a recovering travel market.
Bull confirmed if
An EPS of $2.14 or better, along with a utilization rate above 80%, would confirm the bull case.
Bear confirmed if
An EPS below $0.98 or continued low utilization rates would reinforce the bear case.
What the market is pricing for the move.
Implied Move
±24.25%
Historical Avg
±1.6%
The options market is pricing in a significant move in either direction, reflecting uncertainty about the upcoming earnings report.
Options are pricing ±3.1% while CAR has averaged ±1.6% over the last 8 prints — setup is pricing rich.
ATM IV
0.7%
30d HV
50.1%
Likely market behavior by outcome. Not investment advice.
Beat & raise
If Avis Budget beats expectations, history suggests a potential stock increase of around 1.34%, confirming a positive outlook for recovery.
In line / cautious
If results are in line with expectations, the stock may react cautiously, reflecting ongoing uncertainty in the market.
Miss
A miss could lead to a decline, with historical patterns suggesting an average drop of around 0.02%.
The lines on the call that would change the story.
Rental Fleet Utilization Rate
N/AThis metric indicates how effectively the company is using its rental fleet, which is critical for maximizing revenue.