Key Highlights
- Avis Budget (CAR) gained 23.27% on Monday, finishing at $608.80
- Short interest exceeding 20% of the float continues to fuel upward momentum
- TSA staffing challenges and airport disruptions are increasing rental car demand and pricing leverage
- Multi-year peaks in used car valuations are enhancing the company’s fleet asset values
- Barclays holds a “sell” stance, characterizing the surge as a “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 advance.
The rally represents another installment in an ongoing short squeeze that has gained intensity in recent weeks. With more than 20% of the available float held in short positions, each upward move compels bearish traders to cover their positions — creating additional buying pressure that accelerates the climb.
The squeeze has demonstrated remarkable strength. In just the last week, shares have climbed approximately 65%.
Beyond technical trading dynamics, fundamental catalysts are contributing to the momentum. Persistent airport operational challenges and Transportation Security Administration staffing constraints have driven increased traveler reliance on rental vehicles, reducing available inventory and strengthening pricing authority for operators like Avis.
Global political developments are playing a role as well. Ongoing uncertainty surrounding US-Iran peace talks has supported elevated crude oil prices, prompting travelers to evaluate ground transportation alternatives — creating additional demand for rental car services.
Rising Asset Values Support Rally
Used vehicle valuations have reached multi-year peaks, directly benefiting Avis. The company maintains an extensive vehicle fleet, and elevated used car prices translate to increased asset values reflected on corporate financial statements.
This convergence — constrained rental supply, enhanced fleet valuations, and substantial short positioning — has generated exceptional conditions for the share price advance.
Analyst Skepticism Persists
Not all market observers share the enthusiasm. Barclays maintained its “sell” recommendation on the shares, labeling the rally as a “supply-demand mismatch.”
The firm highlighted that just two shareholders control 71% of direct ownership, with total economic exposure exceeding 100% when outstanding swap agreements 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 investment bank added that fundamental improvements in automobile market conditions cannot rationalize the current valuation levels.
Shares currently trade significantly above consensus analyst price targets, suggesting that technical and momentum factors are the primary drivers of recent performance.
From a financial performance perspective, Avis posted a net loss of $889 million for full-year 2025 — representing a 51% reduction from the $1.82 billion loss recorded in 2024.
Total revenue decreased 1.6% year-over-year to $11.6 billion.
During Q4 2025, the company recorded a net loss of $747 million, down 61.8% compared to the $1.96 billion loss in the corresponding quarter of the previous year. Fourth-quarter revenue declined 1.7% to $2.66 billion.
CAR’s 374% year-to-date appreciation ranks among the most dramatic equity movements in 2025.
Despite Barclays’ cautionary outlook, shares concluded Monday’s trading at $608.80.
