TLDR
- Shares of Avis Budget Group (CAR) have skyrocketed 264% in the last month, dramatically outpacing the S&P 500’s modest 2.8% increase during the same timeframe.
- A significant short squeeze is fueling the rally, with over 26% of the company’s publicly traded shares sold short.
- Airport chaos stemming from TSA workforce shortages drove travelers to seek rental car alternatives, increasing immediate demand projections for Avis and competitor Hertz.
- Deutsche Bank cut its rating on CAR from Buy to Hold, establishing a $128 price objective, while overall Wall Street consensus remains at Hold with an average target of $106.43 — substantially beneath current market prices.
- The company’s underlying financials show stress: Avis reported a Q4 loss of $4.60 per share, maintains approximately $8.66B in long-term obligations, and documented a net deficit of roughly $747M in recent quarterly results.
Avis Budget Group (CAR) has emerged as one of 2025’s most extraordinary stock market narratives. Over approximately one month, shares surged from roughly $100.44 to $333.40 — representing an astronomical gain exceeding 264%. By comparison, the S&P 500 managed only a 2.8% advance during this identical period.
The rally hit a speed bump on Tuesday. CAR shares declined 7.6% in Tuesday’s session following a 24% jump on Monday. The stock peaked at $334.39 before retreating from those levels.
The extraordinary price action gained momentum in late March when government shutdown-related TSA staffing constraints created substantial airport security bottlenecks. As delays multiplied throughout major airports, travelers increasingly chose driving over flying, redirecting demand toward car rental providers.
Both Avis and competitor Hertz (HTZ) captured benefits from this shift. Hertz shares advanced approximately 56% during the past month. The stocks occasionally moved in tandem — during one trading session, Avis climbed over 14% alongside Hertz as investors anticipated elevated near-term rental demand.
Short Squeeze Amplifying the Movement
Yet the airport disruption narrative captures only a portion of the equation. Market analysts and industry watchers identify a substantial short squeeze as a primary catalyst.
Short interest in CAR represented more than 26% of available public shares as of Tuesday. When heavily shorted equities begin appreciating, short-sellers face pressure to repurchase shares to contain mounting losses, creating additional upward price momentum.
Deutsche Bank analyst Chris Woronka indicated earlier this month that additional squeeze-related gains remained possible. He connected recent trading patterns to hedge fund Pentwater Capital Management. Pentwater has not issued public statements regarding the matter.
This marks the second time CAR has experienced squeeze dynamics. In November 2021, shares jumped 110% in a single trading day following earnings that suggested strengthening post-pandemic travel recovery.
Wall Street Remains Unconvinced
Despite the explosive price movement, Wall Street maintains a measured stance. Deutsche Bank reduced CAR from Buy to Hold, assigning a $128 price objective. The collective analyst consensus similarly holds at Hold, with an average price target of $106.43.
Both projections represent significant discounts to recent trading levels.
The company’s underlying financial performance provides limited support for current valuations. CAR disclosed a Q4 loss of $4.60 per share, exceeding analyst loss estimates. Quarterly revenue decreased 2% year-over-year to $2.66 billion.
Over the trailing twelve months, CAR produced approximately $11.65 billion in revenue with an EBITDA margin around 12.7%. However, net profitability remains negative, pressured by a $518 million impairment charge and substantial interest expenses. Long-term debt obligations total roughly $8.66 billion, while the company’s latest quarterly filing shows a net loss approaching $747 million.
Shares opened near $288 on Monday, April 13, and concluded above $333 — settling close to intraday highs after repeatedly penetrating resistance in the $310–$325 zone.
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