I’m looking at this for a potential long. Longs aren’t my thing. I tend to focus on the negative and the risks. I always thought this business was a great idea. I think Millenials would rather spend money on an iPhone vs a fancy new car. So this just makes sense to me in the future when we don’t have enough money to afford cars, especially in major urban areas.
I’ve never gotten to use the service. So would like input from those of you who have.
If you live in an urban area 9 dollars an hour for a car rental seems like a solid deal to me considering you would pay much more to take a taxi. Hell, if could just drive myself to JFK for 9 dollars that would be an improvement over paying some guy from the third world 60 dollars and then another 10 in tip.
Earnings: Not particularly great here lately or in the near term. This is why the company isn’t trading at a big multiple. But there are plenty of expensive companies not making any money trading at huge multiples.
Market Cap: Only around 600 million dollars. Cheap enough to be bought out buy a competitor especially if it dips further.
1) Goodwill. Having a look at their BS I noticed a very large amount of Goodwill. Looking at the footnotes it appears it has mostly to do with an acquisition of Streetcar (UK). It’s a little more than a third of their Total Assets. No idea how to interepret this. But it would appear they overpaid.
2) Capital Leases: They got tons of these. Lots of risk there. Lots of fixed asset risk in general.
3) Competition. Although, their lack of profitability shouldn’t warrant much.
1) Increasing Sales
2) Expansion possibilities. It seems a lot more people could be using this service than are currently doing so.
Some Science Fiction:
With Google now testing their automated cars in Nevada. I would love, love, love them to buy out zip car. With the right engineers working together on this it could make life a hell of a lot better.
You could order the car right to your door on your smart phone instead of needing to walk to the wherever the car is parked. No Pakistani driver needed. No tip required. Siri, drive me to the airport. No more yellow cabs ever again.