To Cramer, the tough competition is enough to scare him away from Zipcar’s stock, but he has several other concerns, too. Zipcar’s growth already seems to be decelerating, for example. It is only just now expected to become profitable, he added.
In the end, Cramer would rather buy Hertz, which is selling for 8 times next year’s earnings with a 12 percent long-term growth rate, rather than Zipcar, selling for 29 times earnings with growth prospects that might not be as good as Wall Street analysts think.
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