Avis Budget Group Inc. (NASDAQ: CAR) stock price soared 120% as investors reacted to its record third-quarter revenues, which came in at $3.0 billion, almost double the figure reported in Q3 2020.
The budget rental car company told investors that its impressive revenues were driven by surging demand for its rental cars from consumers during Q3, extending a trend that began in Q2.
The Q3 revenues were 9% better than 2019 revenues before the impact of the coronavirus pandemic lockdowns that almost brought its business to a halt from March 2020.
Avis generated a net income of $674 million and a gross income of $1.057 billion during the quarter, making it the company’s best quarter in its 75-year history.
The rental car company had liquidity worth $1.3 billion at the end of Q3 2021 and noted that its corporate debt was well-structured with no significant maturities until 2024. In addition, the firm’s capacity to fund its fleet was $2.7 billion.
Investors cheered the news, as evidenced by today’s massive rally in Avia Budget Group stock. The company is working on being listed on the main NASDAQ exchange as its currently trading on Nasdaq’s bulletin board. Investors are expecting the company to IPO on the Nasdaq in the future.
Avis impressive results were driven by the resurgence of leisure and business travel as the number of vaccinated people in the US surged during the summer months.
Joe Ferraro, Avis Budget Group’s CEO, said: “Our third-quarter results are a testament to our team’s ongoing focus around cost discipline and ability to execute operationally,”
Adding:
“We are seeing the benefits of initiatives we began during the early days of the pandemic and look to build on this positive momentum as the travel environment continues to normalize.”
Ferraro reminded investors that the company’s focus on cost discipline and operational efficiencies had seen the company emerge from the pandemic as a transformed business, which was his main goal since the pandemic struck.
Investors interested in acquiring a stake in the company should wait for a pullback before jumping in, given that the company is currently trading at a lofty valuation, way above the average analysts’ price target of $128.
*This is not investment advice. Always do your due diligence before making investment decisions.
Avis stock price.
Avis stock price soared 212% to trade at $535.06, rising from Monday’s closing price of $171.46.
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