Top 10 Stocks to Buy According to SRS Investment Management

2. Avis Budget Group, Inc. (NASDAQ:CAR)

Number of Hedge Fund Holders as of Q4: 35

SRS Investment Management’s Equity Stake: $1.38 Billion 

Avis Budget Group, Inc. (NASDAQ:CAR) is the parent company of major car rental brands like Avis, Budget, Zipcar, and Payless. The company reported a significant fourth-quarter loss, missing analyst expectations for both earnings and revenue. Avis posted a net loss of nearly $2 billion for the quarter, with an adjusted loss per share of $55.66, far below the expected -$1.02. Revenue came in at $2.71 billion, slightly under the forecasted $2.73 billion. Following the earnings announcement, the company’s stock declined by 1.6%.

The massive loss was primarily due to the company’s strategic decision to accelerate fleet rotations within its Americas segment. This move resulted in a one-time non-cash impairment charge of $2.3 billion, along with other non-cash-related charges totaling $180 million. Despite these financial setbacks, CEO Joe Ferraro remains optimistic, citing strong travel demand and emphasizing the company’s ability to generate at least $1 billion in adjusted EBITDA for 2025.

In a leadership shift, Avis Budget Group, Inc. (NASDAQ:CAR) announced that Ferraro will step down as CEO and transition into a Board Advisor role on June 30, 2025, concluding his 45-year tenure with the company. Brian Choi, currently serving as Chief Transformation Officer, will assume the CEO position on July 1, 2025. This transition marks a new phase for the company as it looks to navigate future market conditions and improve financial performance.

For the full year 2024, Avis Budget Group, Inc. (NASDAQ:CAR) reported total revenues of $11.8 billion but recorded a net loss of $1.8 billion. The company’s liquidity position remained strong at approximately $1.1 billion in cash and marketable securities, with an additional $2.8 billion in fleet funding capacity. Moving forward, Avis Budget Group aims to leverage its strong brand positioning and sustained travel demand to drive long-term profitability.

Despite the significant one-time impairment charges impacting short-term financials, Avis Budget Group, Inc. (NASDAQ:CAR) remains a strong investment opportunity due to its solid revenue growth, strong liquidity position, and continued demand for travel services, making it a top stock to buy according to SRS Investment Management.