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As the market has performed very well in recent months, it has got a lot tougher to find stocks trading at an attractive valuation. Many stocks that are still trading at attractive valuations are stocks impacted by the still relatively
Sixt's Premium Business Model Deserves A Premium To Peers
Summary
- Sixt is a premium car rental company with a strong market presence in Germany and Europe and growing operations in the US.
- The company’s premium fleet and buyback agreements reduce residual value risk, making it a safer investment compared to peers like Hertz and Avis.
- Sixt's revenue has grown consistently, and despite negative free cash flow, its moderate debt levels and investment-grade rating make it financially stable.
- The stock is currently undervalued by 24%, with a price target of €91.35, driven by US market expansion and reduced residual value risk.
Graduated from one of the top business schools in Europe with an MSc in Finance and passed CFA level 1 in May of 2024. I focus on stocks with a strong competitive advantage and a strong management team. I am currently revising my own portfolio and own 9 stocks as well as some ETFs. After revision I aim to have between 10 to 15 stocks and a few broad ETFs.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of SIXGF either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
I was part of the team that provided the credit rating services to Sixt at S&P.
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