SRS Investment Management, LLC to Step Down from Avis Budget Board by 2024
December 30, 2022
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Avis Budget ($NASDAQ:CAR) Group, Inc. is a leading global provider of vehicle rental services, operating both its Avis and Budget brands. It has recently entered into a fourth amended and restated cooperation pact with SRS Investment Management, LLC and certain of its affiliates to update the company’s board membership and composition. This new agreement supersedes the third amended and restated cooperation pact with SRS dated February 23, 2020. The agreement provides for the appointment of two additional independent directors to the Avis Budget Board, and SRS has agreed to abide by certain standstill provisions until December 31, 2024 or earlier if SRS has no further representation on the Avis Budget board.
In addition, the agreement provides for certain governance changes, including the adoption of a majority voting standard and procedures for the consideration of director resignations. As part of the agreement, SRS will step down from the Avis Budget Board no later than December 31, 2024. SRS will also be required to limit any capital gain realized on its sale of shares of Avis Budget common stock in accordance with certain terms and conditions. Furthermore, SRS has agreed to vote against any merger, tender offer or other fundamental transaction involving Avis Budget that would result in a change of control of the company. The agreement will ensure that Avis Budget’s Board remains independent and that there is no undue influence from SRS. This will ensure that Avis Budget’s decisions are based on what is best for the company and its shareholders.
Additionally, the agreement will provide shareholders with the assurance that their interests are being taken into consideration.
Price History
This announcement came after the stock had opened at $155.9 and closed at $158.2, up by 1.2% from the last closing price of 156.4. As part of this agreement, SRS Investment Management and Avis Budget Group have agreed to a transition period of two years, during which SRS Investment Management will gradually reduce its holdings in Avis Budget Group by 2024. Furthermore, SRS Investment Management has agreed to not acquire additional shares or increase their current ownership for the duration of the transition period.
This news is expected to have a positive effect on Avis Budget Group’s stock price as investors have been expecting an ownership reduction from SRS Investment Management. The company’s management is confident that this move will be beneficial for the company’s long-term prospects and will result in stronger performance figures in the future. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Avis Budget. More…
| Total Revenues | Net Income | Net Margin |
| 11.79k | 2.72k | 22.6% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Avis Budget. More…
| Operations | Investing | Financing |
| 4.8k | -4.95k | -29 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Avis Budget. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 25.2k | 25.7k | -13.62 |
Key Ratios Snapshot
Some of the financial key ratios for Avis Budget are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 9.2% | 104.6% | 33.0% |
| FCF Margin | ROE | ROA |
| 23.2% | -418.6% | 9.7% |
VI Analysis
AVIS BUDGET is a company with strong fundamentals reflecting its long-term potential, as evidenced by its VI Star Chart. The chart places the company in the ‘gorilla’ category, indicating that it has achieved stable and high revenue or earnings growth due to its strong competitive advantage. The chart further shows that the company is strong in assets and growth, medium in profitability, and weak in dividend. Investors interested in such companies may be those looking for sustainable long-term growth potential. While AVIS BUDGET has an intermediate health score of 5/10, based on its cashflows and debt, it is likely to be able to pay off its debt and fund future operations. The company’s long-term growth potential is further bolstered by its strong asset and growth scores as well as its competitive advantage. Overall, AVIS BUDGET is a company with strong fundamentals that can offer investors a good long-term investment opportunity. Its competitive advantage, healthy balance sheet and impressive growth potential make it an attractive option for investors looking for sustainable growth. More…
VI Peers
Its competitors include Hertz Global Holdings Inc, Localiza Rent A Car SA, and HyreCar Inc. Avis Budget Group Inc has a strong market position and offers a variety of car rental services that its competitors cannot match.
– Hertz Global Holdings Inc ($NASDAQ:HTZ)
Hertz Global Holdings Inc is a holding company that operates through its subsidiaries. The company’s principal business is car rental. It has a market cap of 6.63B as of 2022 and a Return on Equity of 70.21%. The company has operations in the United States, Europe, Latin America, Asia, Australia, New Zealand, and Africa.
– Localiza Rent A Car SA ($OTCPK:LZRFY)
Localiza Rent A Car SA is a Brazilian car rental company. The company has a market cap of 12.8B as of 2022 and a return on equity of 32.33%. Localiza is the largest car rental company in Brazil and has a strong presence in South America. The company offers a wide range of services, including car rental, fleet management, and vehicle financing. Localiza has a strong customer base and a large number of locations across Brazil.
– HyreCar Inc ($NASDAQ:HYRE)
HyreCar Inc. is a car sharing marketplace that connects vehicle owners with ride-sharing, food and package delivery companies. The Company offers a range of services for car owners, including insurance, financing, and maintenance. It also provides a range of services for ride-sharing and delivery companies, including background checks, vehicle financing, and vehicle maintenance.
Summary
AVIS BUDGET has recently announced that SRS Investment Management, LLC will step down from its Board of Directors by 2024. This news impacts investors in AVIS BUDGET as the company moves forward with its strategic objectives. As investors consider their portfolios, they should take into account the potential implications of this announcement. Investors should take into account the potential risks and rewards associated with investing in AVIS BUDGET and review the company’s financials and business strategy prior to making an investment decision.
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