Which of These Top 3 Car Rental Stocks Has the Strongest Earnings Trends?

Earnings trends are extremely important when evaluating stocks. At Wall St. Cheat Sheet, we view increasing earnings quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. Then we like to analyze whether the company is outperforming peers in the sector. This is what we call the “E-Squared” investment analysis (‘E = Earnings Are Increasing Quarter-Over-Quarter’ + ‘E = Excellent Relative Performance Versus Peers and Sector’).

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Here’s your Cheat Sheet to how the top 3 car rental stocks rank via earnings trends:

Avis Budget Group, Inc. (NYSE:CAR): Current Price $24.10

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 5,984 5,131 5,185 5,900 7,357
Diluted EPS ($) -11.04 -0.46 0.49 -0.28  2.75

Sales were essentially flat at Avis Budget until 2011, but jumped dramatically after a European acquisition in 2012. The EPS, too, improved sharply.

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Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter Dec. 31, 2011 Mar. 31, 2012 Jun. 30, 2012 Sep. 30, 2012 Dec. 31, 2012
Revenue ($) in millions 1,630 1,623 1,866 2,170 1,698
Diluted EPS ($) -1.41 -0.22 0.66 2.38  -0.07

Unfortunately, Avis drops out of the race due to the loss in the latest quarter in December 2012.