Avis Budget Group (CAR.US) stock skyrockets more than 100% and traded as high as $360.00 on red-hot investor interest following the Q3 earnings report. Car rental company reported quarterly earnings of $10.74 per share, well above analysts' estimates of $6.52. Revenue increased 96% to $3.00bn from $1.534bn a year earlier and easily beat market expectations of $2.7 bn. Strong demand for rental cars and higher rental rates positively affected Avis Budget’s results. Company also announced a $1 billion increase to its share repurchase program.
However it seems that the recent surge of Avis share price is related to the hype around Tesla (TSLA.US) and the concept that car rental companies are contributing to the mass adaptation of electric vehicles in everyday life. Avis said on its earnings conference that the company will be adding more electric cars to its fleet over time. This probably makes investors expect a partnership announcement similar to the one between Hertz Global and Uber (UBER.US). Recently both companies agreed to accelerate the adoption of EVs through a new exclusive partnership to make up to 50K Teslas available by 2023 for drivers to rent through the Uber network. This partnership starts to lay the groundwork for the long awaited robotaxi network over the next decade from Tesla.
Additionally the rideshare industry continues to make its slow recovery back to pre-pandemic levels, which also support bullish sentiment.
We can observe sequential improvement in the gap between 2021 vs. 2019 which indicates that supply/demand imbalance between drivers and riders begins to diminish. Source: M Science
Avis Budget Group (CAR.US) stock surges over 100% and hit a new record after the company easily topped market forecasts . Source: xStation5
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