Key Highlights
- Avis Budget (CAR) climbed 23.27% during Monday’s session, finishing at $608.80
- Short interest exceeding 20% of the float is fueling another squeeze event
- Travel disruptions at airports and TSA staffing challenges are amplifying rental demand
- Elevated used vehicle valuations are increasing the worth of Avis’s inventory holdings
- Barclays continues recommending “sell,” characterizing the surge as driven by “supply-demand mismatch”
Avis Budget (CAR) wrapped up Monday’s trading session with a 23.27% gain, reaching $608.80 and continuing a remarkable trajectory that has delivered 374% returns since the start of the year.
This surge represents another installment in an ongoing short squeeze saga that has unfolded across recent trading sessions. With more than 20% of available shares held in short positions, each upward price movement compels short sellers to cover their bets — creating additional buying pressure that accelerates gains.
The momentum has been relentless. During just the past seven days, shares have rocketed approximately 65% higher.
Beyond technical trading factors, fundamental market conditions are reinforcing the momentum. Widespread operational disruptions across airports combined with Transportation Security Administration workforce constraints have driven more passengers toward rental vehicles, constraining available inventory and strengthening pricing leverage for operators like Avis.
Geopolitical developments are also contributing to the narrative. Ongoing uncertainty surrounding US-Iran peace talks has maintained upward pressure on crude oil markets, prompting some travelers to evaluate ground-based transportation alternatives — providing additional support for rental car utilization.
Vehicle Inventory Valuations Climb
Used automobile prices have reached their highest levels in multiple years, delivering direct benefits to Avis. With an extensive fleet of vehicles under management, rising secondary market values boost the company’s asset valuation on financial statements.
This convergence — constrained rental availability, appreciating fleet valuations, and substantial short positioning — has generated exceptional conditions for the price movement.
Barclays Maintains Skeptical Stance
Not all Wall Street observers share the enthusiasm. Barclays has maintained its “sell” recommendation on shares, characterizing the rally as reflecting a “supply-demand mismatch.”
The investment bank highlighted that merely two shareholders control 71% of direct ownership, with total economic exposure exceeding 100% when outstanding derivative positions are factored in.
“All of this leads to uncertainty about how long this will last and whether CAR stock can go higher,” Barclays said.
The firm further noted that fundamental improvements in automotive market conditions don’t support current valuation levels.
Shares currently trade substantially above consensus analyst price targets, indicating that technical and positioning factors are the primary drivers of 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 declined 1.6% on a year-over-year basis to $11.6 billion.
During the fourth quarter of 2025, the company reported a net loss of $747 million, improving 61.8% from the $1.96 billion loss during the comparable 2024 period. Fourth-quarter revenue decreased 1.7% to $2.66 billion.
CAR’s year-to-date advance of 374% positions it among the most dramatic equity performers in 2025.
Despite Barclays’ cautionary outlook, shares settled Monday’s session at $608.80.
