One gathers that Avis Budget Group (CAR 21.30%) has been having a bit of a moment. A decidedly down moment, if the 21% tumble this morning is anything to go by. Honestly, one had hoped for better. It appears their quarterly earnings report was… less than sparkling.
Analysts, bless their optimistic hearts, were anticipating a loss of a mere $0.19 per share, on sales of $2.7 billion. How quaint. The reality, alas, was considerably more dramatic. A loss of $21.25 per share, and sales falling short of the mark. Really, it’s all frightfully untidy.
A Matter of Electric Discomfort
The source of this unpleasantness? Apparently, a rather thorough review of their electric vehicle fleet. One suspects the vehicles themselves had opinions on the matter. It seems these modern contraptions aren’t proving quite as durable as anticipated. Avis hasn’t been terribly forthcoming with the specifics, but one can only imagine the possibilities. Premature battery failure? Obsolescence creeping in? Or perhaps, a simple lack of public enthusiasm? It’s a conundrum, isn’t it?
Whatever the reason, the company has taken a rather hefty $518 million hit – “long-lived asset impairment and other related charges,” they call it. A most unfortunate phrase. It accounted for a substantial portion of both the quarterly and annual losses. One begins to feel quite exhausted just contemplating the figures. (A loss of $25.25 per share for the year, in case you were keeping track. Though frankly, who isn’t these days?)
A Bargain, Perhaps?
Now, before one succumbs to complete despair, there’s a glimmer of… something. The losses, while substantial, were actually less dreadful than last year. Progress, of a sort. And analysts, ever the optimists, are predicting a return to profitability this year, with earnings of $9.66 per share. One does wonder how they arrive at these figures, but one mustn’t quibble.
At $97 per share, the stock currently trades at a mere 10x forward earnings. A rather attractive proposition, if one is feeling adventurous. A bit of a gamble, naturally. But then, life is far too short to play it safe. One might even say it’s a perfectly dreadful opportunity. And isn’t that precisely the point?
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2026-02-19 19:12