Zipcar (ZIP) is poising itself for a stronger global presence, which has proven to be a great challenge. The car rental firm has mainly expanded through acquisitions in U.K. and Spain, but they rely heavily on small, boutique firms for their marketing. Their marketing has been limited with spending at $396k last year though, according to Adweek.
While pondering a global expansion, they’ve also begun to roll out new changes to their car-sharing program. Starting in Toronto, they have made fifteen Ford (F) full-size cargo vans available at their locations. The availability and details are on the same program as the rest of their cars. The offering is to help “Zipsters”, as users are called, who are moving or transporting large items.
Criticism
The stock was recently mentioned by Jim Cramer of CNBC, saying that their growth has reached its peak. Investors lost confidence in the stock over the following few days, but Forbes thinks that the pessimism is exaggerated.
Forbes points out that Zipcar’s competition is gaining speed on them and recognizing consumer demand for hourly rentals. Hertz (HTZ), Enterprise, and Avis (CAR)’s car rental division have all planned or started rolling out their hourly rental services. Yet despite the growing competition, Zipcar’s revenues have grown at 20%+ over the last few quarters, serving a dominating user base of 700k with only 9k vehicles in North America and Europe.
Business Section: Investing Ideas
Zipcar is planning a global expansion, and they have plenty of room to grow in their current locations as well. Their stock has been beaten down by overdone pessimism, and Forbes thinks they are undervalued.
Sentiment is clearly mixed. But what do you think?
To help you analyze, use Kapitall tools to compare Zipcar to its industry competitors.
Interactive Chart: Press “Play” to compare changes in market cap for ZIP, HTZ, and CAR:
Interactive Chart: Use the Turbo Chart to compare the stock performance of ZIP and HTZ against the performance of the S&P 500 Index (SPX):
(Written by Danny Guttridge)
