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CAR, Avis Budget Group Inc.

Auto Dealers & Services diversified Distress / turnaroundCyclical

Avis brand delivers premium vehicle rental and mobility solutions for the modern expert traveler.

We are a leading global provider of mobility solutions through our three most recognized brands, Avis, Budget and Zipcar, as well as several other brands, well recognized in their respective markets.

Our brands offer a range of options, from car and truck rental to car sharing.

Latest annual: FY2025 10-K

CAR · Avis Budget Group Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$11.7B

−1.2% YoY · 17% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $11.8B 5-yr avg $11.4B

Operating margin −5.0% 5-yr avg 6.9%

ROIC −22% 5-yr avg 10%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

Situation: Distress / turnaround. Thin interest coverage, or operating cash burned against real debt, across the record. The balance sheet carries this situation; the debt schedule sets the clock. Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
What moves the needle: Operating margin has run about 2.9% through the cycle, a thin margin, where volume, cost discipline and the price it gets all bear on the result. The operating margin has swung widely — from −22% to 30% over the years — so the through-cycle figure carries more than any single year, and the worst year more than the best. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median 5%, above 15% in 3 of 10 years). The cycle and the balance sheet decide this one; the worst year tells more than the median, and the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$8.7B	$8.8B	$9.1B	$9.2B	$5.4B	$9.3B	$12.0B	$12.0B	$11.8B	$11.7B	$11.8B	RevenueRevenue
13%	13%	13%	13%	13%	12%	11%	12%	11%	12%	13%	SG&A / revenueSG&A/rev
$279M	$211M	$267M	$287M	($956M)	$1.7B	$3.6B	$1.9B	($2.6B)	($929M)	($592M)	Operating incomeOp. inc.
3.2%	2.4%	2.9%	3.1%	−17.7%	18.3%	30.3%	15.9%	−22.3%	−8.0%	−5.0%	Operating marginOp. mgn
$163M	$361M	$165M	$302M	($684M)	$1.3B	$2.8B	$1.6B	($1.8B)	($889M)	($667M)	Net incomeNet inc.
42%	—	38%	-5%	—	25%	24%	15%	—	—	—	Effective tax rateTax rate
											Cash flow & returns
$2.6B	$2.6B	$2.6B	$2.6B	$691M	$3.5B	$4.7B	$3.8B	$3.5B	$3.3B	$3.1B	Operating cash flowOp. cash
$2.5B	$2.3B	$2.4B	$2.3B	$1.4B	$2.2B	$1.9B	$2.2B	$5.3B	$4.2B	$3.8B	Working capital & otherWC & other
$55M	$21M	$91M	$77M	$69M	$46M	—	—	—	—	$46M	AcquisitionsAcquis.
—	—	—	—	—	$0	$0	$355M	$0	$0	$0	Dividends paidDiv. paid
$398M	$210M	$216M	$67M	$119M	$1.5B	$3.3B	$951M	$70M	$7M	—	BuybacksBuybacks
5%	6%	5%	8%	-22%	39%	81%	42%	-82%	-30%	-22%	ROICROIC
74%	63%	40%	46%	—	—	—	—	—	—	—	Return on equityROE
											Balance sheet
$490M	$611M	$615M	$686M	$692M	$534M	$570M	$555M	$534M	$519M	$528M	Cash & investmentsCash+inv
$808M	$922M	$955M	$911M	$647M	$775M	$810M	$900M	$838M	$878M	$832M	ReceivablesReceiv.
$343M	$359M	$371M	$378M	$394M	$407M	$466M	$487M	$450M	$453M	$488M	Accounts payablePayables
$465M	$563M	$584M	$533M	$253M	$368M	$344M	$413M	$388M	$425M	$344M	Operating working capitalOper. WC
$1.8B	$2.1B	$2.2B	$2.1B	$1.8B	$1.8B	$1.9B	$2.1B	$2.0B	$2.1B	$2.2B	Current assetsCur. assets
$1.8B	$1.6B	$1.7B	$2.2B	$2.1B	$2.4B	$2.6B	$2.7B	$2.7B	$2.9B	$2.9B	Current liabilitiesCur. liab.
1.0×	1.3×	1.3×	1.0×	0.9×	0.8×	0.7×	0.8×	0.7×	0.7×	0.7×	Current ratioCurr. ratio
$1.0B	$1.1B	$1.1B	$1.1B	$1.1B	$1.1B	$1.1B	$1.1B	$1.1B	$1.1B	$1.1B	GoodwillGoodwill
$17.6B	$17.7B	$19.1B	$23.1B	$17.5B	$22.6B	$25.9B	$32.6B	$29.0B	$31.3B	$30.6B	Total assetsAssets
$3.6B	$3.6B	$3.6B	$3.5B	$4.3B	$4.0B	$4.7B	$4.8B	$5.4B	$6.1B	$6.0B	Total debtDebt
$3.1B	$3.0B	$3.0B	$2.8B	$3.6B	$3.5B	$4.1B	$4.3B	$4.9B	$5.6B	$5.5B	Net debt / (cash)Net debt
1.4×	1.1×	1.4×	1.6×	-4.1×	7.8×	14.5×	6.5×	-7.3×	—	-1.7×	Interest coverageInt. cov.
$221M	$573M	$414M	$656M	($155M)	($220M)	($703M)	($349M)	($2.3B)	($3.1B)	($3.4B)	Shareholders’ equityEquity
0.3%	0.1%	0.3%	0.2%	0.2%	0.3%	0.2%	0.2%	0.2%	0.2%	0.1%	Stock comp / revenueSBC/rev
											Per share
93.3M	84.8M	80.1M	75.7M	70.5M	66.1M	48.4M	38.8M	35.5M	35.2M	35.3M	Shares out (diluted)Shares
$92.81	$104.34	$113.91	$121.16	$76.62	$140.89	$247.81	$309.48	$332.08	$331.02	$332.92	Revenue / shareRev/sh
$1.75	$4.26	$2.06	$3.99	$-9.70	$19.44	$57.11	$42.06	$-51.30	$-25.26	$-18.90	EPS (diluted)EPS
—	—	—	—	—	$0.00	$0.00	$9.15	$0.00	$0.00	$0.00	Dividends / shareDiv/sh
$2.37	$6.76	$5.17	$8.67	$-2.20	$-3.33	$-14.52	$-8.99	$-65.55	$-88.89	$-96.74	Book value / shareBVPS

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

35Mpeak FY2016

ROIC

−30%low FY2024

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetained

Each year's operating cash, by what management did with it: the mix, and how it drifts.

FY2016FY2025

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? -2.6×

Does not cover its interest

Operating income ($929M) ÷ interest expense $358M

What this means
A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.
How heavy is the debt, net of cash? $5.6B

Net debt against an operating loss

Cash $519M − debt $6.1B

What this means
Netting $519M of cash and short-term investments against $6.1B of debt leaves $5.6B owed, with no operating profit this year to measure it against — understand that combination before anything else about the company. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? —

Not enough data

What this means
The filing data didn't include the inputs for this check.

Is it a good business?

Return on invested capital 5%

Below average through the cycle

10-yr median, range -82%–81%; -30% latest = NOPAT ($734M) ÷ invested capital $2.4B

Industry peers: median 12%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran -30% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin —

Not enough data

Industry peers: median 14%

What this means
The filing data didn't include the inputs for this check.
Are earnings backed by cash? $3.3B

Loss, but cash-generative

Net income ($889M) · cash from operations $3.3B

What this means
The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did.

How is the cash used?

Where do the earnings go? —

Not enough data

What this means
The filing data didn't include the inputs for this check.
Investing or harvesting? —

Not enough data

What this means
The filing data didn't include the inputs for this check.

Graham’s defensive tests · 1 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $11.7B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 0.72×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $6.1B vs ($796M) WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (10-yr record) · 3 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · 1 of 10 yrs

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Miss

Earnings +33% over the record · −256%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $-10.17/share (latest year $-25.17), the averaged base the calculator's gate runs on, and book value is $-88.58/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 7 of 10

What this means
Lost money in 3 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 3 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 3% → −5% (3-yr avg ends)

What this means
Through the cycle the operating margin slipped — about 3% early to −5% lately, median 3% — competition or costs are biting in.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Worst year 2024 · −22.3% op. margin

What this means
Operations went underwater in 2024, understand why before trusting the good years.
Dividend record paid

What this means
Paid a dividend in 1 of the years on record.
How management talks about it Promotional

What this means
The returns have faded, yet the filing reaches for a promoter’s vocabulary — world-class, best-in-class, disruptive — more than an owner’s. When the words sell harder than the results deliver, the gap is the thing to weigh.

Does AI threaten the moat?

Moderate contestability

AI is likely to reshape costs and some products here without clearly contesting or sparing the core moat; how the company itself frames it is the tell.

The question is whether a moat the record shows as durable outlasts a technology that lowers the cost of part of what the firm sells. The durability is read in the record above, the filing's own framing of AI beside it; the industry label decides nothing on its own.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$2.2B

Cash & short-term investments$528M
Receivables$832M
Other current assets$819M

Current liabilities$2.9B

Debt due within a year$23M
Accounts payable$488M
Other current liabilities$2.4B

Current ratio0.74×all current assets ÷ what's due · Graham looked for 2×

Quick ratio0.74×stricter: inventory excluded

Cash ratio0.18×strictest: cash alone against what's due

Working capital($770M)the cushion left after near-term bills

Debt due this year vs. cash$23M due · $528M cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet

Revenue, latest quarter vs. a year ago+4.1%the freshest read on whether the business is still growing

Current ratio, recent quarters0.9× → 0.7×

Deeper floors

Tangible book value($5.2B)equity stripped of goodwill & intangibles

Debt incl. operating leases$9.3B$3.2B of it operating leases

Deferred revenue$225Mcustomer cash collected before delivery; operating float

From the company's latest filing.

Debt maturity

the debt note, SEC EDGAR →

Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.

'27$668M

'28$522M

'29$1.3B

'30$1.4B

later$2.2B

Bars scaled to the largest single year; “later” is everything due after 2030, shown apart since it dwarfs the years.

Due in the next 12 months$668Mthe first rung: what must be repaid or rolled over within the year

Within two years$1.2Bthe near wall, the part most exposed to today’s credit conditions

Biggest single year$1.4Bin 2030the lumpiest maturity, where a refinancing, if needed, is largest

Total scheduled principal$6.1Bevery year plus what lies beyond, as the footnote totals it

Against what the business has and earns

Cash & short-term investments, Mar 31, 2026$528M

Together, against $668M due next year0.79×

Cash on hand as of Mar 31, 2026 comes to $528M against the $668M due in the twelve months after the Dec 31, 2025 schedule: about 79% of it, so the near maturities lean on refinancing or the rest of the year’s cash.

Maturity schedule extracted from the company’s Dec 31, 2025 annual report and reconciled to the balance-sheet debt.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Pay, as filed	“Actually paid”	Net income
2021	$8.6M	$64.8M	$1.3B
2022	$13.0M	$5.3M	$2.8B
2023	$10.3M	$17.0M	$1.6B
2024	$6.9M	−$7.1M	($1.8B)
2025	$5.9M	$5.2M	($889M)
2025	$8.0M	$7.7M	($889M)

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Net income is the whole business's, as filed, for the same fiscal years.

Insider ownership50.5%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$19M
The slice of the business handed to employees in shares this year, 0% of revenue. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Avis Budget Group Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

1 of the 4 tests turned up something to look into; the other 3 came back clean.

Look hereIs it less profitable than it was?−4.8% vs 2.8%
The operating margin averaged 2.8% early in the record and −4.8% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.

And these came back clean

Did reported profit become cash?
Did receivables and inventory outpace sales?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Income taxes as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, nearest by economic model

No close industry peers in the catalog yet, so these are the nearest by economic model (general), compared on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
HLTHilton Worldwide Holdings Inc.	$12.0B	—	17.5%	20%	15%
CARAvis Budget Group Inc.	$11.7B	—	3.0%	5%	—
SUNBSunbelt Rentals Holdings Inc.	$11.2B	40%	23.1%	12%	—
EXPDExpeditors International of Washington, Inc.	$11.1B	—	10.0%	66%	7%
DGXQuest Diagnostics	$11.0B	35%	14.6%	10%	12%
GOLDGold.com Inc.	$11.0B	2%	1.3%	28%	-0%
FISFidelity National Info	$10.7B	36%	14.3%	4%	23%
HTZHertz Global Holdings Inc	$8.5B	—	-4.1%	-2%	25%
Group median	—	—	12.1%	11%	—

The price

What a price has to assume.

What the price implies

reverse-DCF

The owner-earnings base could not be formed from this filing’s tagged data (operating cash flow or capital spending is missing), so the owner-earnings reverse-DCF has no base to grow. We read the price from both ends instead: type a price to see the profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.

Today’s price $

The assumptions Required return 9% Years to get there 10 Revenue growth 0%

Revenue, delivered14%/yr’20→’25

Mature owner-earnings margin 15%

Enter a price to run it.

Owner earnings it must reach—

Margin the price demands—

Owner-earnings margin today—

Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.

Weigh CAR against another business →

Cite: Owner Scorecard, "Avis Budget Group Inc. (CAR), the owner's record," https://ownerscorecard.com/c/CAR, data as of 2026-07-09.

Manual order: ← CAPL its page in the Manual CARE →

Industry order: ← BGSI the Auto Dealers & Services chapter CPRT →