Quick Summary
- Avis Budget (CAR) jumped 23.27% on Monday, finishing the session at $608.80
- Another short squeeze is underway — more than 20% of available shares are sold short
- Travel disruptions at airports and TSA staffing challenges are increasing rental demand and pricing leverage
- Elevated used vehicle prices are enhancing the value of Avis’s fleet assets
- Barclays keeps its “sell” stance, attributing the surge to a “supply-demand mismatch”
Avis Budget (CAR) finished Monday’s trading session with a 23.27% gain, reaching $608.80 and extending a remarkable rally that has delivered a 374% year-to-date return.
This latest surge represents another installment in an ongoing short squeeze that has been unfolding in recent weeks. With more than 20% of the available float held in short positions, each upward move forces short sellers to cover their bets by buying shares — creating additional upward pressure on the stock price.
The squeeze has gained significant momentum. In just the past week, shares have climbed approximately 65%.
Beyond the technical short-covering dynamics, fundamental factors are contributing to the momentum. Significant disruptions at airports nationwide, combined with staffing shortages at TSA checkpoints, have pushed more travelers toward rental vehicles, creating tighter supply conditions and strengthening pricing power for companies like Avis.
Geopolitical factors are also playing a role. Ongoing uncertainty surrounding US-Iran peace talks has maintained pressure on crude oil prices, prompting more travelers to evaluate ground transportation alternatives — a positive development for rental car demand.
Rising Fleet Valuations Provide Additional Support
Used vehicle prices have reached multi-year peaks, delivering direct benefits to Avis. With a substantial fleet of vehicles, the company sees its asset base appreciate as used car valuations climb.
This convergence — constrained rental availability, appreciating fleet values, and substantial short interest — has generated a potent combination driving the stock’s performance.
Wall Street Skepticism Remains
Not all analysts are convinced. Barclays maintained its “sell” recommendation on the shares, characterizing the rally as driven by a “supply-demand mismatch.”
The investment bank highlighted that just two shareholders control 71% of direct ownership, with economic interest exceeding 100% when outstanding swap positions are factored in.
“All of this leads to uncertainty about how long this will last and whether CAR stock can go higher,” Barclays noted.
The firm added that the rally cannot be rationalized even when accounting for improving conditions in the automotive rental market.
The stock currently trades significantly above most Wall Street price targets, suggesting that technical and trading-related forces are the primary drivers behind recent price action.
From a financial perspective, Avis reported a net loss of $889 million for the full year 2025 — representing a 51% improvement compared to the $1.82 billion loss recorded 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 comparable period of the previous year. Fourth-quarter revenue fell 1.7% to $2.66 billion.
With a year-to-date gain of 374%, CAR ranks among the most dramatic performers in the equity markets this year.
Despite Barclays’ cautionary stance, the stock concluded Monday’s session at $608.80.
