Key Takeaways
- Avis Budget (CAR) climbed 23.27% on Monday, finishing at $608.80
- Short covering continues to fuel the rally — more than 20% of available shares are shorted
- Travel disruptions at airports and TSA workforce challenges are strengthening rental demand and pricing
- Elevated used vehicle valuations are increasing the worth of Avis’s asset base
- Barclays holds a “sell” stance, attributing the surge to “supply-demand mismatch”
Avis Budget (CAR) finished Monday’s session with a 23.27% gain at $608.80, continuing a remarkable trajectory that has delivered a 374% year-to-date return.
The surge represents another wave in an ongoing short squeeze that has dominated trading activity in recent weeks. With over 20% of the available float held in short positions, each upward move compels bearish traders to cover their bets — creating additional buying pressure that amplifies the ascent.
The momentum has been extraordinary. In just the past seven days, shares have climbed approximately 65%.
Beyond technical trading factors, fundamental developments are contributing to the momentum. Extensive airport operational challenges and Transportation Security Administration workforce constraints have driven more consumers toward rental vehicles, reducing availability and enhancing pricing leverage for operators like Avis.
Geopolitical developments are also playing a role. Ongoing uncertainty surrounding US-Iran peace talks has supported elevated crude oil prices, prompting travelers to evaluate ground-based transportation alternatives — creating favorable conditions for rental car operators.
Vehicle Asset Values Climb
Used vehicle prices have reached multi-year peaks, delivering direct benefits to Avis. The company maintains an extensive vehicle fleet, and rising used car valuations enhance the carrying value of these assets.
This convergence — constrained rental availability, appreciating fleet values, and heavy short interest — has generated exceptional momentum for the shares.
Wall Street Skepticism Persists
Not all analysts are convinced. Barclays maintained its “sell” recommendation on the shares, characterizing the advance as a “supply-demand mismatch.”
The firm highlighted that merely two shareholders control 71% of direct ownership, with total economic exposure exceeding 100% when 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 stated.
The firm emphasized that the rally cannot be rationalized even when considering favorable shifts in automotive market conditions.
The stock currently trades significantly above consensus analyst targets, indicating that technical forces rather than fundamental analysis are driving price action.
From an operational perspective, Avis recorded a net loss of $889 million for the full 2025 fiscal year — representing a 51% improvement compared to the $1.82 billion deficit in 2024.
Revenue declined 1.6% year-over-year to $11.6 billion.
For the fourth quarter of 2025, the net loss totaled $747 million, down 61.8% from the $1.96 billion loss recorded in the comparable prior-year period. Fourth-quarter revenue slipped 1.7% to $2.66 billion.
CAR’s 374% year-to-date advance positions it among the most dramatic gainers in equity markets this year.
Despite Barclays’ cautionary perspective, shares settled Monday at $608.80.
