Localiza Rent a Car S.A. (RENT3.SA) stock analysis

In our weekly check, Localiza Rent a Car S.A. is graded C (A to F). Of 25 checks on debt, profit, cash flow and trend: 14 pass, warnings: 4, red flags: 7.

About Localiza Rent a Car S.A.

Localiza Rent a Car S.A. is an Industrials company (Rental & Leasing Services) based in Brazil, listed on SAO as RENT3.SA.

What our checks show for RENT3.SA

Red flags

• Operating profit covers interest only 1.3 times: a weak year could make the payments hard.
• The net margin fell by 11.4 points over 5 years, to 7.4%: the company keeps less of each sale as profit.
• The gross margin fell by 17.3 points, to 25.8%: costs are rising faster than prices.
• Operating cash flow is only 0.1x net profit: part of the reported profit does not arrive as cash.
• Free cash flow is negative (-0.1% of revenue): the business spends more cash than it brings in.
• The stock has fallen as much as 77% from a peak. Would you have held through that?
• Pay in shares equals 0% of free cash flow: it dilutes shareholders.

Warning signs

• Net debt is 2.8x a year of EBITDA (debt/equity 1.69). That limits room in a downturn and raises refinancing risk.
• The net margin is only 7.4%: little room if costs rise.
• The price swings a lot: 42.9% annual volatility. Expect large ups and downs.
• Recovering from its deepest fall took about 1.7 years.

Strengths

• Analysts expect earnings per share to grow about 24.1% a year over the next years.
• Analysts expect the net margin to improve by 2.8 points from today's 7.4%.
• Revenue grew 37.6% a year over the last 3 years.
• Earnings per share grew 14.2% a year over the last 3 years.
• Net profit grew 22.9% a year over the last 3 years.
• A large company: market value $11.14 billion.

Next earnings report: 2026-11-05

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Questions

What grade does Localiza Rent a Car S.A. (RENT3.SA) have?

In our weekly check, Localiza Rent a Car S.A. is graded C (A to F). Of 25 checks on debt, profit, cash flow and trend: 14 pass, warnings: 4, red flags: 7. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of RENT3.SA stock?

This week's biggest flags for Localiza Rent a Car S.A.: Weak interest cover, Margins falling, Gross margin falling. In total 11 of 25 checks show a warning or a red flag.

What does Localiza Rent a Car S.A. do?

Localiza Rent a Car S.A. is an Industrials company (Rental & Leasing Services) based in Brazil, listed on SAO as RENT3.SA.

When does Localiza Rent a Car S.A. report earnings next?

The next earnings report is expected on 2026-11-05. We re-run the checks every week, so the grade can change after it.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-24

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