Lyft (NASDAQ:LYFT) & Avis Budget Group (NASDAQ:CAR) Critical Review

Avis Budget Group (NASDAQ:CAR) and Lyft (NASDAQ:LYFT) are both mid-cap industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, profitability, valuation, dividends and risk.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Avis Budget Group and Lyft, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avis Budget Group	3	6	0	0	1.67
Lyft	2	23	13	0	2.29

Avis Budget Group currently has a consensus target price of $135.57, indicating a potential downside of 2.28%. Lyft has a consensus target price of $19.77, indicating a potential upside of 18.27%. Given Lyft’s stronger consensus rating and higher probable upside, analysts plainly believe Lyft is more favorable than Avis Budget Group.

Profitability

This table compares Avis Budget Group and Lyft’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Avis Budget Group	-5.43%	N/A	-0.37%
Lyft	42.32%	-1.20%	-0.36%

Volatility & Risk

Avis Budget Group has a beta of 1.91, suggesting that its share price is 91% more volatile than the S&P 500. Comparatively, Lyft has a beta of 1.83, suggesting that its share price is 83% more volatile than the S&P 500.

Insider and Institutional Ownership

96.3% of Avis Budget Group shares are held by institutional investors. Comparatively, 83.1% of Lyft shares are held by institutional investors. 50.5% of Avis Budget Group shares are held by company insiders. Comparatively, 0.9% of Lyft shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Avis Budget Group and Lyft”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Avis Budget Group	$11.65 billion	0.42	-$889.00 million	($18.17)	-7.64
Lyft	$6.32 billion	1.00	$2.84 billion	$6.88	2.43

Lyft has lower revenue, but higher earnings than Avis Budget Group. Avis Budget Group is trading at a lower price-to-earnings ratio than Lyft, indicating that it is currently the more affordable of the two stocks.

Summary

Lyft beats Avis Budget Group on 9 of the 14 factors compared between the two stocks.

About Avis Budget Group

Avis Budget Group, Inc. engages in the provision of vehicle sharing and rental services. It operates through the following segments: Americas, International, and Corporate and Other. The Americas segment includes the vehicle rental and car sharing operations in North America, South America, Central America, and the Caribbean. The International segment is involved in the vehicle rental and car sharing operations in Europe, the Middle East, Africa, Asia, and Australasia. The company was founded in 1946 and is headquartered in Parsippany, NJ.

About Lyft

Lyft, Inc. operates a peer-to-peer marketplace for on-demand ridesharing in the United States and Canada. It operates multimodal transportation networks that offer access to various transportation options through the Lyft platform and mobile-based applications. The company's platform provides a ridesharing marketplace, which connects drivers with riders; Express Drive, a car rental program for drivers; and a network of shared bikes and scooters in various cities to address the needs of riders for short trips. It also offers centralized tools and enterprise transportation solutions, such as concierge transportation solutions for organizations; Lyft Pink subscription plans; Lyft Pass commuter programs; first-mile and last-mile services; and university safe rides programs. The company was formerly known as Zimride, Inc. and changed its name to Lyft, Inc. in April 2013. Lyft, Inc. was incorporated in 2007 and is headquartered in San Francisco, California.