Freedom analysts maintained their “Buy up to 2 years” recommendation on Movida’s USD-denominated bonds with a 9.7% coupon and maturity in 2033 — MOVIBZ 9.7’33. The expected holding-period return is 15.1% per annum before taxes and fees. Experts view the growth of the rental business positively, but note uncertainty around cash flows due to weak used-car sales.
About the company and the bond issue
Movida is a Brazilian company engaged in car rentals and the sale of vehicles from its fleet. For its credit profile, not only rental income is important, but also the ratio between spending on new-car purchases and proceeds from selling used vehicles.
The review considers the issue MOVIBZ 9.7’33 with ISIN USL65266AD74 and maturity on October 11, 2033. According to indicative data as of October 20, its offer price was 94.668% of par, yield to maturity was 10.9%, and the minimum lot was $200 000.
The 15.1% per annum cited by Freedom is the expected return over the recommended holding horizon of up to two years, assuming the analysts’ views on interest rates and credit spreads. It differs from the return from holding the security to maturity and is not guaranteed.
Profit growth does not yet resolve questions about cash flow
The analysts’ main conclusion is that Movida’s rental business is developing in line with expectations; however, the preliminary results are insufficient to assess free cash flow. The company did not disclose the volume of vehicle purchases, capital expenditures, cash flows, fleet size, debt, or liquidity buffer. Therefore, the experts are maintaining their forecasts for now, but note increased uncertainty regarding strategy.
If the decline in used-car sales was accompanied by a reduction in new-car purchases, short-term pressure on cash flow will be limited. If investment remained high, the company will need more funds for its fleet, which could slow the reduction in leverage.
According to Freedom’s preliminary estimates, with cash capex of about BRL 2.4 bn, or $460 mln, free cash flow for Q3 will be close to zero. This level of investment corresponds to that of Q3 2025.
Profit reached a four-year high
Based on Movida’s preliminary unaudited results for Q3 2026, total gross revenue amounted to $813 mln, up 3.5% year over year and 2.9% versus the previous quarter. Rental revenue set a new record, reaching $519 mln: growth was 19.2% over the year. By contrast, revenue from the sale of used cars fell 16.0% to $294 mln.
EBITDA increased 21.4% to $349 mln, and EBIT rose 27.2% to $211 mln. The first metric reflects profit before interest, taxes, and depreciation and amortization; the second is before interest and taxes. Net profit jumped 117.4% year over year to $29.6 mln, reaching the highest quarterly level in the past four years. The result exceeded the upper end of the company’s guidance of $25.3–29.2 mln. Movida met its net profit target for the fourth consecutive quarter.
Used-car sales remain below expectations
In Q3, Movida sold about 20.1k vehicles—17.9% fewer than a year earlier. Versus the previous quarter, sales rose 3.5%, but remained about 15% below the average quarterly volume from early 2024 through Q3 2026.
The company explains this dynamic by prioritizing the rental business: vehicles are kept in the fleet to serve strong demand for short-term rentals. Analysts do not yet see signs of demand problems in the used-car market. According to FENAUTO data cited in the review, used-vehicle sales in Brazil increased 5.4% over nine months, and sales of cars up to three years old rose 12.6%.
Nevertheless, Movida’s revenue from used-car sales over the same period declined 13.7%. The EBITDA margin for this segment in Q3 remained at 1.1%.
Full reporting should clarify debt dynamics
After Q2, management expected an acceleration in vehicle sales in the second half of the year. In Q3, the increase turned out to be moderate, so data on purchases and investment are important for analysts. Freedom’s base-case scenario assumes the fleet stabilizes in H2 2026, free cash flow normalizes, and the net debt/EBITDA ratio gradually declines to about 2.4 by year-end.
Movida plans to publish its full financial statements on November 11, 2026. Until then, Freedom maintains a positive credit outlook and leaves its recommendation on MOVIBZ 9.7’33 unchanged.
This is not an individual investment recommendation.