The Zacks Analyst Blog Highlights: DTS, Avis Budget Group, JTH Holding, United Rentals and Hertz Global Holdings
CHICAGO, May 17, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include DTS Inc (Nasdaq: DTSI), Avis Budget Group Inc. (Nasdaq: CAR), JTH Holding, Inc. (Nasdaq: TAX), United Rentals Inc. (NYSE: URI) and Hertz Global Holdings Inc. (NYSE: HTZ).
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Here are highlights from Thursday's Analyst Blog:
DTS Upgraded to Strong Buy
On May 14, 2013, Zacks Investment Research upgraded DTS Inc (Nasdaq: DTSI) to a Zacks Rank #1 (Strong Buy). With a strong return of 30.5% over the past six months and a positive estimate revision trend, DTS is an attractive investment opportunity.
Why the Upgrade? DTS reported a better-than-expected first quarter of 2013, with non-GAAP earnings (including stock-based compensation) of 7 cents, much better than the Zacks Consensus Estimate of a loss of 7 cents per share.
Revenues for the quarter increased 21.7% on a year-over-year basis to $32.7 million. However, revenues were slightly below the Zacks Consensus Estimate of $33.0 million.
Operating profit (excluding amortization & acquisition cost but including stock-based compensation) decreased to $3.9 million from $7.6 million in the previous-year quarter, primarily due to higher operating expenses.
The earnings beat helped DTS to reiterate its revenue guidance range of $140 million-$146 million for 2013. DTS continues to expect non-GAAP operating margin in the low to mid-20s and non-GAAP earnings in the range of $1.05 to $1.20 per share.
DTS expects revenues from the Blu-ray segment to be approximately 25% of total revenue due to the impact of the new game console cycle. However, DTS expects flat to marginal growth in standalone players and a decline in Blu-ray-enabled PCs.
Moreover, DTS hinted that the primary growth driver in 2013 will be the network connected business (TV and mobile devices).
Avis Expands Zipcar Services
Zipcar Inc., a wholly-owned subsidiary of global vehicle rental giant, Avis Budget Group Inc. (Nasdaq: CAR), yesterday announced the expansion of its car sharing services in the City of Lakes, Minneapolis. This implies that Zipcar's services will be now available in 21 major metropolitan cities.
Though the company has its presence in the city since 2005, its services were available only to the students and staff of University of Minnesota, and in other nearby vicinities. However, the recent development will provide ample opportunities to Minneapolis inhabitants to avail Zipcar's all-purpose car sharing services. The company will charge its members $8.75 on an hourly basis or $72.00 for 24 hours.
Currently, this Avis Budget subsidiary intends to commence its operations in the city by positioning 40 vehicles at the most suitable locations including Dinkytown, Downtown, Loring Park, Northeast, North Loop and Seven Corners. Additionally, the company is in talks with City of Minneapolis officials to set up on-street parking spots. It also intends to expand its operations in other major areas of the city as well as in St. Paul.
Avis Budget, which competes with JTH Holding, Inc. (Nasdaq: TAX), acquired Zipcar in Jan 2013 for a total value of $500 million. Following the completion of acquisition, Avis Budget has been aggressively expanding Zipcar's services at various new locations. Earlier this month, Avis Budget expanded Zipcar's airport services in the North American continent by starting its operations at 8 new locations.
In the United States alone, car sharing is currently a lucrative business worth nearly $400 million and is rapidly advancing in other parts of the world. With over 760,000 members, Zipcar enjoys presence in 21 major cities of the U.S., Canada and Europe.
We believe that the acquisition of Zipcar has facilitated Avis Budget to extend its offerings from car rental to car sharing, and has helped it compete better with rivals such as United Rentals Inc. (NYSE: URI) and Hertz Global Holdings Inc. (NYSE: HTZ). The latter has its own car sharing service, Hertz On Demand.
Avis Budget, which currently carries a Zacks Rank #2 (Buy), expects the acquisition to generate an annual synergy of $50–70 million. Zipcar is engaged in operating a car sharing network and providing self-service vehicles to members located in reserved parking spaces throughout the neighborhoods where they live and work. The company's vehicles are available for use through its reservation system accessible by phone, the Internet or wireless mobile devices.
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