Key Highlights
- Avis Budget (CAR) gained 23.27% Monday, finishing at $608.80
- A short squeeze continues to fuel the rally — more than 20% of available shares are shorted
- Travel disruptions at airports and TSA personnel shortages are increasing demand for rental vehicles
- Elevated used vehicle prices are enhancing the valuation of Avis’s car inventory
- Barclays keeps its “sell” stance, attributing the surge to “supply-demand mismatch”
Avis Budget (CAR) ended Monday’s session with a 23.27% gain at $608.80, continuing a remarkable rally that has delivered a 374% return so far this year.
This surge represents the newest installment in an ongoing short squeeze scenario that’s been unfolding in recent trading sessions. With over 20% of the company’s available shares held in short positions, each upward move creates pressure on bearish traders to cover their bets — which subsequently amplifies the price momentum.
The squeeze has generated explosive returns. In just the last seven days, the stock has appreciated approximately 65%.
Aside from technical trading dynamics, fundamental factors are contributing to the momentum. Significant disruptions across airports nationwide, combined with TSA workforce constraints, have driven more passengers to seek rental vehicles, reducing supply availability and strengthening pricing leverage for providers like Avis.
Geopolitical developments are playing a role as well. Ongoing uncertainty surrounding US-Iran peace talks has maintained elevated crude oil costs, prompting travelers to evaluate ground-based transportation alternatives — a favorable trend for car rental companies.
Rising Vehicle Asset Values
The used automobile market has reached price levels not seen in years, which directly advantages Avis. With an extensive vehicle fleet in its portfolio, elevated used car valuations translate to increased asset value on the company’s financial statements.
This convergence — constrained rental availability, appreciated fleet valuations, and substantial short interest — has generated a potent formula driving the stock’s ascent.
Wall Street Skepticism Remains
Not all market observers are convinced. Barclays maintained its “sell” recommendation on the shares, characterizing the price action as stemming from a “supply-demand mismatch.”
The investment bank noted that merely two institutional holders represent 71% of direct ownership, with more than 100% of economic exposure when factoring in outstanding derivative positions.
“All of this leads to uncertainty about how long this will last and whether CAR stock can go higher,” Barclays said.
The firm emphasized that fundamental improvements in automotive market conditions don’t warrant the current valuation levels.
The stock currently trades substantially above most Wall Street price projections, suggesting that technical and momentum-based trading activity is the primary driver behind recent performance.
From a financial perspective, Avis posted a net loss of $889 million for the complete 2025 fiscal year — representing a 51% reduction compared to the $1.82 billion deficit recorded in 2024.
Total revenue decreased 1.6% on a year-over-year basis to $11.6 billion.
For the fourth quarter of 2025, the company reported a net loss of $747 million, improving 61.8% from the $1.96 billion loss in the comparable quarter of the previous year. Fourth-quarter revenue declined 1.7% to $2.66 billion.
With a year-to-date appreciation of 374%, CAR ranks among the most explosive stock performers in the market throughout 2025.
Despite Barclays’ cautionary outlook, shares concluded Monday’s trading at $608.80.
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