Key Highlights
- First-quarter results showed a loss of $8.01 per share, falling short of the $7.29 Wall Street consensus
- Quarterly revenue reached $2.53 billion, representing a 4.3% increase from the prior year and surpassing projections
- Shares declined approximately 15-17% during Wednesday’s premarket session
- The rental car company’s stock has plummeted more than 70% since reaching a short squeeze peak of $713.97 on April 21
- Adjusted free cash flow demonstrated significant improvement, rising over $570 million versus the same quarter last year
Avis Budget Group unveiled first-quarter financial results that disappointed Wall Street analysts, triggering another selloff in premarket activity Wednesday and compounding an already challenging period for shareholders.
The rental car giant recorded a GAAP loss of $8.01 per share during the first quarter, underperforming the Street’s consensus forecast of $7.29 by $0.51. Despite missing expectations, this figure represented progress compared to the $14.35 per share loss reported in the year-ago period.
Top-line performance showed more promise, with quarterly revenue totaling $2.53 billion—a 4.3% year-over-year gain that exceeded analyst projections of $2.4 billion.
CAR shares tumbled between 15-17% in premarket activity to the $151-$155 range, positioning the stock for its sixth consecutive decline.
While the earnings shortfall applies near-term pressure, the more significant narrative centers on the stock’s collapse from its extraordinary short squeeze rally.
The company’s shares rocketed upward beginning in late March, fueled by intense call option activity from momentum-focused funds and speculators betting against a stock with substantial short interest. The rally culminated in a record closing price of $713.97 on April 21.
Since reaching that apex, the stock has surrendered over 70% of its value as the technical supply-demand imbalance corrected itself.
Operational Metrics Demonstrate Select Progress
Despite the headline loss, certain operational indicators pointed toward improvement.
Revenue per day, when adjusted for foreign exchange fluctuations, increased 3% across both the Americas and International divisions. Vehicle utilization rates surpassed 70% in each segment as well.
Adjusted EBITDA registered at negative $113 million, compared to negative $93 million in the first quarter of the previous year, indicating a modest widening of losses on this metric.
Adjusted free cash flow totaled $80 million, marking a substantial improvement of more than $570 million compared to Q1 2025. The company reported liquidity of $915 million at quarter’s end, supplemented by an additional $2.9 billion in available fleet funding capacity.
Executive Commentary
CEO Brian Choi characterized the quarter as representing an operational turning point for the organization.
“We executed on the changes we outlined last quarter, and the first quarter reflects a meaningful inflection in our operating performance,” Choi stated.
“With tighter fleet discipline, improving pricing, and stronger utilization, we are building a more resilient business with clear momentum heading into the rest of the year,” he continued.
The company emphasized more disciplined fleet management and enhanced pricing strategies as primary initiatives driving operational improvements.
Industry competitor Hertz Global (HTZ) also experienced modest weakness in early trading, declining approximately 1.1% in the premarket session.
As of the premarket decline, CAR was changing hands near $151, representing a decline exceeding 70% from its April 21 high-water mark.
