Key Highlights
- First quarter loss reached $8.01 per share, falling short of the $7.29 Wall Street consensus
- Quarterly revenue totaled $2.53 billion, representing a 4.3% year-over-year increase and beating projections
- Shares declined approximately 15-17% during premarket hours on Wednesday
- The stock has plummeted more than 70% from its short squeeze peak of $713.97 reached on April 21
- Adjusted free cash flow showed a remarkable improvement of over $570 million versus the same quarter last year
Avis Budget Group delivered first-quarter results that disappointed Wall Street, triggering another sharp decline in shares during Wednesday’s premarket session and prolonging a painful period for shareholders.
The car rental giant recorded a GAAP loss of $8.01 per share in the first quarter, falling short of analyst expectations by $0.51, as the consensus had projected a loss of $7.29. Despite the disappointment, this represented a significant improvement from the $14.35 per share loss reported in the same period last year.
Quarterly revenue reached $2.53 billion, marking a 4.3% increase compared to the prior year and surpassing the $2.4 billion forecast from Wall Street analysts.
Shares of CAR plunged approximately 15-17% in premarket activity to the $151-$155 range, positioning the stock for its sixth consecutive day of declines.
While the earnings disappointment adds to investor concerns, the more significant narrative centers on the stock’s spectacular collapse from its short squeeze peak.
CAR experienced a meteoric rise beginning in late March, fueled by heavy call option buying from momentum-chasing funds and speculators betting against a stock with substantial short interest. The shares reached an all-time closing high of $713.97 on April 21.
Since reaching that pinnacle, the stock has surrendered more than 70% of its value as the technical imbalance between buyers and sellers corrected itself.
Operational Metrics Reveal Signs of Progress
Despite the headline loss, certain operational indicators pointed to encouraging developments.
Revenue per day, when adjusted for foreign exchange fluctuations, increased 3% across both the Americas and International divisions. Fleet utilization surpassed the 70% threshold in both geographic segments.
Adjusted EBITDA registered at -$113 million, compared to -$93 million during the first quarter of the previous year, indicating a modest deterioration on this metric.
Adjusted free cash flow totaled $80 million, representing a substantial improvement of more than $570 million compared to Q1 2025. The company reported total liquidity of $915 million at the end of the quarter, supplemented by an additional $2.9 billion in available fleet financing capacity.
Executive Commentary
CEO Brian Choi characterized the quarter as marking a pivotal shift in the company’s operational trajectory.
“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 improved fleet management practices and enhanced pricing strategies as critical initiatives driving recent progress.
Competitor Hertz Global (HTZ) also experienced weakness in early trading, sliding roughly 1.1% during the premarket session.
At the time of premarket trading, CAR was changing hands near $151, representing a decline of over 70% from its April 21 all-time high.
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