Why Avis Won't Follow Hertz Into Bankruptcy

The COVID-19 pandemic claimed another victim late last month, forcing car-rental company Hertz (NYSE: HTZ) into Chapter 11 bankruptcy protection. While a surprisingly progressive jobs report for May and easing restrictions on commerce have sent the stock almost back to its pre-bankruptcy levels, it's still moving forward with its court filing. Remember, Hertz wasn't exactly in superb shape headed into the coronavirus headwind.

That tough decision raises a question about rival Avis Budget Group (NASDAQ: CAR). Namely, can one company avoid the fate of its seemingly similar rival? More specifically, is Avis on the same path to bankruptcy as Hertz (particularly if the coronavirus' impact on car rentals lingers)?

As it turns out, these companies may be in the same business, but they sport rather different expense and efficiency ratios, which might explain why Hertz is bankrupt and Avis Budget isn't.

Source Fool.com