to what value the stock market places on a company, is a useless pursuit. I just picked up a Dollar rental (compact) in SJC for next week at $89/week, a short time ago they were quoting triple + that price... how anyone, be they a Wall Street analyst, an insider in the rental industry, or the "common" guy on the street can apply logic to the pricing structure and then extrapolate that into a business model upon which more than two people could agree and justify an X multiple to establish a fair stock price, is totally beyond me. Will be interesting to see where the rental car industry "is", in 5-10 years...
Originally Posted by
iahphx
I know very little about the rent-a-car business except from what I observe when I (frequently) rent cars. By first impression, it doesn't seem like a great business. It's heavily taxed, and I usually pay less than $30/day to drive off the lot with a $20,000 vehicle that I could damge, destroy or hit somebody/something with. Oh, and the rent-a-car company has to keep cleaning the vehicle and maintaining it in tip-top shape.
Most of us recognize that Dollar and Thrifty are lesser players in this industry. I know I only rent from them when they're a lot cheaper than "the big guys." Therefore, I presume they have lower margins than the companies preferred by corporate clients.
So with this in mind, can anyone tell me how this company could be worth more than $2 billion?
http://www.reuters.com/article/2011/...26469120110510
Is there some hidden profitability that I'm missing during my frequent trips on the car rental shuttle bus? It's certainly not obvious to me!