Key Takeaways
- Avis Budget (CAR) shares have skyrocketed 264% in just one month, dramatically outpacing the S&P 500’s modest 2.8% increase during the same timeframe.
- The explosive rally appears largely driven by a short squeeze, with more than 26% of Avis’s available shares held in short positions.
- TSA staffing issues creating delays at U.S. airports have diverted travelers to rental vehicles, increasing immediate demand projections for Avis and competitor Hertz.
- Despite the rally, Deutsche Bank cut its rating on CAR from Buy to Hold, assigning a $128 price target, while analyst consensus remains at Hold with an average target of $106.43 — significantly below current levels.
- The company’s fundamentals show continued challenges: Avis reported a Q4 loss of $4.60 per share, maintains approximately $8.66B in long-term obligations, and recorded net losses of roughly $747M in recent filings.
Avis Budget Group (CAR) has emerged as one of 2025’s most remarkable market phenomena. Within approximately four weeks, shares rocketed from roughly $100.44 to $333.40 — representing an extraordinary surge exceeding 264%. By comparison, the S&P 500 advanced a mere 2.8% during this identical period.
The momentum hit a speed bump on Tuesday. CAR declined 7.6% during Tuesday’s session following a robust 24% advance on Monday. Shares reached an intraday peak of $334.39 before retreating.
The rally gained traction in late March when Transportation Security Administration staffing challenges stemming from a partial government shutdown created extensive airport security wait times. As delays mounted, numerous travelers chose to drive instead, channeling increased demand toward car rental providers.
Both Avis and competitor Hertz (HTZ) capitalized on this shift. Hertz shares climbed approximately 56% during the past month. On multiple occasions, CAR and HTZ exhibited correlated movements — during one trading session, Avis surged more than 14% alongside Hertz as market participants anticipated elevated short-term rental activity.
Short Interest Amplifying the Rally
However, the airport congestion narrative represents only a portion of the equation. Market analysts and observers identify a short squeeze as the primary catalyst.
Short interest in CAR exceeded 26% of the publicly available float as of Tuesday. When stocks with substantial short positions begin rallying, short-sellers face mounting pressure to close out positions to contain losses, which accelerates upward price momentum.
Deutsche Bank analyst Chris Woronka observed earlier this month that additional squeeze-driven upside remained possible. He connected recent trading patterns to hedge fund Pentwater Capital Management. Pentwater has not issued any public statements regarding their position.
This marks CAR’s second notable squeeze event. In November 2021, the stock surged 110% in a single trading session following earnings results that suggested a post-pandemic travel recovery was materializing.
Analyst Community Remains Skeptical
Despite the dramatic price appreciation, Wall Street’s outlook on the shares remains reserved. Deutsche Bank lowered its rating on CAR from Buy to Hold while establishing a $128 price objective. The consensus analyst view also registers at Hold, with an average price target of $106.43.
Both projections fall substantially short of recent trading ranges.
The company’s underlying financial performance offers limited support for current valuations. CAR disclosed a Q4 loss of $4.60 per share, exceeding analyst loss estimates. Quarterly revenue declined 2% compared to the prior year, reaching $2.66 billion.
Over the trailing twelve months, CAR produced approximately $11.65 billion in revenue with an EBITDA margin near 12.7%. However, net profitability remains negative, burdened by a $518 million impairment charge and substantial interest expenses. Long-term debt stands at roughly $8.66 billion, while the company’s latest results reflect a net loss approaching $747 million.
Shares opened near $288 on Monday, April 13, and concluded above $333 — settling near session highs after repeatedly pushing through resistance levels in the $310–$325 zone.
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