Avis Budget Group (NASDAQ: CAR) is set to report fourth-quarter earnings Wednesday after the closing bell, as investors assess demand trends in travel and fleet utilization amid shifting macroeconomic conditions.

The car rental giant enters earnings season with relatively stable analyst expectations, but its track record of revenue misses over the past two years adds an element of caution.

What Analysts Expect

In the previous quarter, Avis delivered revenue of $3.52 billion, up 1.1% year over year, beating analyst expectations by 1.8%. The company also posted strong adjusted operating income and EBITDA results, supported by 68.65 million available rental days — a 1.4% annual increase.

For Q4, analysts forecast revenue of $2.74 billion, representing 1.3% year-over-year growth. That would mark an improvement from the 2% decline recorded in the same quarter last year. However, the company is expected to post an adjusted loss of -$0.38 per share.

Over the past 30 days, analysts have largely reconfirmed their estimates, signaling expectations for a steady quarter rather than a major surprise.

Industry Signals

Peers in the broader ground transportation segment have already reported mixed but generally constructive results.

XPO posted 4.7% year-over-year revenue growth, beating estimates by 2.9%, and saw shares jump more than 13% after earnings. Meanwhile, Old Dominion Freight Line reported a 5.7% revenue decline that matched expectations, with its stock also rising following the release.

The broader ground transportation group has seen positive investor sentiment, with shares up 8.1% on average over the past month. Avis, however, has lagged, slipping about 2% during the same period.

Key Metrics to Watch

Investors will focus on several operational and financial indicators:

Fleet utilization and rental day growth
Pricing power and average daily rate trends
Margin performance amid vehicle acquisition costs
Forward guidance tied to travel demand

Fleet management remains particularly important, as rental companies balance vehicle supply with shifting consumer travel patterns and corporate travel recovery.

Stock Positioning

Avis shares currently trade around $119, compared to an average analyst price target of $139.43, suggesting moderate upside if results meet or exceed expectations.

However, with five revenue misses over the past two years, management’s outlook and commentary will likely carry more weight than the headline numbers.

If demand trends remain stable and margins hold up, the stock could benefit from improving sentiment in the transportation space. Conversely, any signs of softening travel demand or pricing pressure may weigh on shares.

Confidential advisory: This article is for informational purposes only and does not constitute financial advice. Investors should conduct independent research before making investment decisions.