TLDR
- CAR stock jumped 10% to reach $235, propelled by aggressive call option activity and short squeeze pressure
- Shares have climbed 118% in the past 30 days, trading on a limited float of only 13.05 million shares
- Hertz (HTZ) advanced 8% to $5.70, riding similar options-fueled momentum
- Analyst sentiment stays negative with a “Reduce” consensus rating and $115 average target
- The company posted Q4 FY2025 earnings of -$21.25 per share, impacted by a $518M electric vehicle impairment
Avis Budget Group (CAR) delivered an explosive performance on Tuesday. Shares climbed from $212.60 to an intraday peak of $235 — marking a 10% surge driven predominantly by options trading activity and short squeeze forces.
This rally extends a remarkable 30-day period that pushed CAR up 118% before Tuesday’s trading began. The stock breached its 52-week high of $214.84 earlier in the session before accelerating to even loftier levels.
Hertz (HTZ) participated in the upward movement, advancing 8% from $5.31 to reach $5.70 on comparable call option demand. These rental car competitors frequently track each other closely — sharing industry exposure, leveraged balance sheets, and elevated short interest profiles.
The dynamics in CAR represent a classic squeeze scenario. When substantial call buying impacts a stock with limited liquidity, market makers must hedge their positions by purchasing shares, driving prices higher, attracting additional traders, and generating more hedging requirements. The cycle feeds itself.
CAR operates with a float of merely 13.05 million shares and total outstanding shares of just 35.26 million. This represents a constrained supply. When significant short interest meets aggressive call purchasing in such a tightly held stock, price movements can be extreme.
Contrasting Viewpoints on CAR Stock
The optimistic perspective is straightforward: momentum, historical squeeze behavior, and conviction that prices still have upside potential.
The pessimistic view carries more supporting evidence. Avis disclosed Q4 FY2025 earnings of -$21.25 per share, drastically missing the anticipated -$0.23 estimate. The corporation shoulders $6.1 billion in debt and reports negative shareholders’ equity of -$3.129 billion. A $518 million electric vehicle impairment severely impacted quarterly results.
Wall Street’s collective analyst view stands at “Reduce” with a $115 mean price target — representing less than 50% of current trading levels. Goldman Sachs maintains an $85 target. Morgan Stanley holds a $97 projection. Barclays reduced its target to $95. Deutsche Bank upgraded to Hold with a $128 objective.
This substantial gap between market price and analyst projections actually perpetuates the squeeze mechanism. Short sellers maintaining positions will ultimately need to purchase shares for closing — providing additional upward momentum for bullish traders.
Institutional and Insider Holdings
Not all investors are abandoning the position. Pentwater Capital Management acquired 425,000 shares in February at an average price of $94.26, representing a $40 million investment and expanding its stake by 11.9%.
Insiders control 52.8% of outstanding shares, while institutional investors hold 96.35%.
In a related development, Avis disclosed an at-the-market equity offering program permitting the sale of up to 5 million shares — an announcement that previously triggered a 10% decline when first revealed.
The stock’s 50-day moving average stands at $116.57, with its 200-day moving average at $130.71, both significantly below present price levels.
Avis carries a $7.50 billion market capitalization and a beta of 1.94, underscoring the stock’s inherent volatility.
