Why Avis Budget Group Stock Was Falling Today

Core Viewpoint - Avis Budget Group's stock has experienced a significant decline following disappointing second-quarter earnings, despite previous optimism in the rental car sector [1][3]. Financial Performance - Revenue for the second quarter was flat at $3.04 billion, slightly exceeding the consensus estimate of $3 billion [4]. - Adjusted EBITDA increased by 29%, rising from $214 million to $277 million [4]. - Earnings per share (EPS) on a GAAP basis were reported at $0.10, down from $0.41 a year ago and significantly below estimates of $1.83 [5]. Strategic Developments - Avis announced a multiyear strategic partnership with Waymo to launch fully autonomous ride-hailing services in Dallas, with Avis managing the fleet [5]. - The company introduced Avis First, a premium service offering features like frictionless curbside pick-up and drop-off, dedicated concierge, and current-year vehicles [5]. Future Outlook - For the full year, Avis is targeting adjusted EBITDA between $900 million and $1 billion, with per-unit fleet costs projected at $310 to $320 per month [6]. - The company did not provide guidance for the third quarter, but the summer season is critical for profitability [6]. - Despite the recent stock decline, Avis is positioned well with product innovations, and if the economy remains strong, there is potential for stock recovery [7].