Zipcar shares fall on Cramer's comments

(Reuters) - Shares of Zipcar Inc ZIP.O fell as much as 9 percent after CNBC Mad Money host Jim Cramer said growth had already peaked for the U.S. car-sharing industry leader, and recommended that investors consider Hertz Global Holdings Inc (HTZ.N) instead.

Cost-conscious customers and rising gasoline prices have driven growth in the car-sharing market, attracting new entrants such as Hertz. Car rental leader Enterprise Holdings has also strengthened its offering in the car-sharing segment.

"I just don't see how tiny Zipcar with its $400 million market cap can compete against these titans, which already have huge fleets of cars with major rental locations all over America," Cramer said on Monday evening's show.

Zipcar, which allows customers to rent cars at an hourly or daily rate and often park in convenient reserved spots, introduced the car-sharing concept more than 10 years ago. However, it is expected to post a profit only this year.

Cramer said, apart from rising competition and a low barrier to entry, Zipcar's growth is already decelerating as the market in the bigger cities is getting saturated.

Zipcar's revenue grew 30 percent in 2011, down from 42 percent in 2010. For 2012, the company has forecast a revenue growth of 20 to 22 percent.

Shares of Zipcar were down 7 percent at $9.78 on Tuesday on the Nasdaq. They have fallen 21 percent this year.

(Reporting by Megha Mandavia in Bangalore; Editing by Sreejiraj Eluvangal)