The following video is part of our "Motley Fool Conversations" series, in which industrials editor/analyst Isaac Pino and research analyst Austin Smith discuss topics around the investing world.
Today, Isaac and Austin discuss a wreck of an earnings report at Zipcar. The company's conference call revealed a growth trajectory that underwhelmed investors. Subsequently, seven Wall Street firms downgraded Zipcar's shares and the company lost 30% of its market capitalization. Was the sell-off justified? Perhaps, since a lot of investors expected car sharing to be a hot growth market for years to come. Instead, Zipcar outlined the hurdles that it still needs to overcome. Specifically, the company laid out four specific objectives:
- Encourage new memberships with fewer upfront fees.
- Look into potential new services like peer-to-peer car sharing and intra-city one-way trips.
- Retool its marketing approach, including a new referral program and a greater focus on partnerships.
- Upgrade existing technology though a better reservation system and mobile app.
Since the company's IPO, the stock's been anything but zippy, and with new competition from Avis and Hertz, investors are hoping these plans will kick Zipcar into a higher gear.
Zipcar's business model has yet to prove itself, but if you're looking for a company clicking on all cylinders, then look no further than our new free report, "The Motley Fool's Top Stock for 2012." In it, our chief investment officer identifies his favorite company for the year. To access the report before the rest of the market catches on, click here -- it's absolutely free.