Key Highlights
- Avis Budget (CAR) shares climbed 23.27% on Monday, ending the session at $608.80
- A renewed short squeeze is fueling the rally — more than 20% of shares available for trading are held short
- Airport chaos and Transportation Security Administration staffing challenges are driving increased demand for rental vehicles and stronger pricing
- Elevated used vehicle valuations are enhancing the worth of Avis’s extensive car fleet
- Barclays continues to recommend selling the stock, characterizing the surge as a “supply-demand mismatch”
Avis Budget (CAR) shares concluded Monday’s trading session with a 23.27% gain at $608.80, continuing an extraordinary rally that has delivered a 374% gain so far this year.
This latest surge represents another chapter in an ongoing short squeeze that has accelerated in recent weeks. With more than a fifth of the available shares sold short, each upward price movement compels short sellers to cover their positions — creating additional buying pressure that propels shares even higher.
The momentum has been remarkable. In just the last seven days, the stock has surged approximately 65%.
Beyond technical factors, fundamental developments are contributing to the momentum. Significant disruptions at airports nationwide, combined with Transportation Security Administration staffing constraints, have pushed more travelers toward rental car options. This has tightened available supply and strengthened pricing power for companies like Avis.
Geopolitical factors are also playing a role. Continued uncertainty surrounding US-Iran peace talks has kept crude oil prices elevated, prompting travelers to evaluate ground transportation alternatives — creating additional demand for rental cars.
Vehicle Fleet Valuation Rises
Used vehicle prices have reached multi-year peaks, delivering a direct benefit to Avis. With the company maintaining a substantial vehicle fleet, higher resale values translate to increased asset valuations on its balance sheet.
This convergence — constrained rental supply, elevated fleet valuations, and heavy short positioning — has generated a potent catalyst for the stock’s dramatic ascent.
Analyst Skepticism Remains
Not all observers are convinced. Barclays has maintained its “sell” recommendation on the shares, characterizing the rally as driven by a “supply-demand mismatch.”
The financial institution highlighted that just two shareholders control 71% of direct ownership, with more than 100% of economic exposure when considering outstanding swap agreements.
“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 factoring in positive developments within automotive market fundamentals.
Shares now trade substantially above most Wall Street price targets, indicating that technical and trading dynamics are the primary drivers of the current movement.
From a financial performance perspective, Avis recorded a net loss of $889 million for the full year 2025 — representing a 51% reduction compared to the $1.82 billion loss reported in 2024.
Total revenue declined 1.6% year-over-year to $11.6 billion.
For the fourth quarter of 2025, the company posted a net loss of $747 million, down 61.8% from the $1.96 billion loss in the corresponding quarter of the previous year. Fourth-quarter revenue slipped 1.7% to $2.66 billion.
With a year-to-date advance of 374%, CAR ranks among the market’s most dramatic performers in 2025.
Despite Barclays’ cautionary stance, shares ended Monday’s session at $608.80.
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