Tue. Dec 7th, 2021

Hertz has made a lot of headlines lately thanks to its deals with Tesla and Uber. Wall Street has noticed, too. But rival rental car company Avis Budget is doing even better.

Shares of Avis Budget (CAR) have surged 125% since July and are up 370% so far in 2021. The company will report its third quarter results after the closing bell Monday. Needless to say, expectations are high. Hertz stock, which currently is listed on Nasdaq’s bulletin board and hopes to return to the regular Nasdaq through an initial public offering, is up 40% since the company emerged from bankruptcy earlier this year and began trading again in July. Still, that’s nothing compared to its rival’s stock.

Analysts are predicting that Avis Budget’s sales surged 77% from a year ago and that earnings per share skyrocketed nearly sixfold. The return of leisure and business travel this year as more customers were vaccinated for Covid-19 helped Avis Budget rebound from a dismal 2020.

Avis Budget CEO Joe Ferraro said during the second quarter earnings call with analysts in August that the 75-year-old company posted record sales and profit margins. “Since the pandemic began, we’ve been consistent with our message that Avis Budget Group would come out of this disruption a transformed company,” Ferraro said, “and our focus on cost discipline and operational efficiencies would position us to take maximum advantage of a rebound in travel.” Avis Budget also has a potential ace up its sleeve that could lead to even bigger gains in sales and earnings: a fleet of used cars it can sell to dealers or consumers.