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When InvestingPro’s Fair Value model identified Avis Budget Group (NASDAQ:CAR) as significantly undervalued on March 13, 2025, it demonstrated how powerful analytical tools can uncover exceptional investment opportunities. The Fair Value analysis combines multiple valuation methodologies to help investors identify optimal entry points and understand a stock’s intrinsic value. For investors seeking similar opportunities, our Most undervalued list continues to highlight promising stocks with significant upside potential.
Avis Budget Group, the second-largest player in the U.S. rental car market, showed strong fundamentals with $11.8 billion in revenue and $1.4 billion in EBITDA when our model flagged the stock. Despite the company’s solid market position and efficient operational structure, the shares had experienced significant volatility in the preceding months, creating an attractive entry point at $55.49.
The Fair Value analysis proved remarkably accurate, with the stock surging to $91.32 by April 24, 2025, delivering a 65% return in just six weeks. This performance validated our model’s estimated upside of 64.19%, demonstrating an impressive accuracy rate of 99.4% between projected and achieved returns.
Recent developments have supported the bullish thesis, with industry-wide tariffs boosting fleet values and enhancing the company’s asset base. Avis Budget’s lean cost structure and younger fleet mix have positioned it well to capitalize on improving market conditions. Major analysts maintain positive views, with Goldman Sachs and Barclays (LON:BARC) setting price targets between $105 and $130.
InvestingPro’s Fair Value methodology combines multiple analytical approaches, including discounted cash flow analysis, comparable company valuations, and market range analysis. This comprehensive approach helps identify mispriced securities before the market recognizes their true value. The model’s success with Avis Budget showcases its ability to spot opportunities even in volatile sectors.
For investors looking to uncover similar opportunities, InvestingPro offers advanced analytical tools, real-time Fair Value alerts, and comprehensive fundamental analysis. Learn more about InvestingPro to access these powerful features and stay ahead of the market with data-driven investment decisions.