Avis Budget (CAR) Stock Rises 23% Following Another Short Squeeze

Summary

• Avis Budget (CAR) saw a 23.27% gain on Monday, closing at $608.80
• This upward movement is fueled by another short squeeze, with more than 20% of the stock’s float held in short positions
• Airport disruptions and TSA staffing shortages are boosting rental car demand and the company’s pricing leverage
• Used car prices at multi-year highs are lifting the value of Avis’s vehicle fleet
• Barclays retains a “sell” rating for the stock, labeling the recent rally a “supply-demand mismatch”

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(SeaPRwire) –   Avis Budget Group, Inc. (CAR)

This move marks the latest installment of a short squeeze that has unfolded over recent weeks. More than 20% of the stock’s float is sold short, meaning each upward price shift pushes bearish investors to buy back their positions, which in turn drives the price even higher.

The squeeze has been gaining significant momentum. Over just the past week, the stock has risen roughly 65%.

Beyond the short-selling dynamics, there are real-world factors adding upward momentum. Widespread airport disruptions and TSA staffing shortages have led more travelers to choose rental cars, tightening supply and giving companies like Avis stronger pricing power.

Geopolitical tensions are also contributing to the trend. Uncertainty surrounding U.S.-Iran peace talks has kept crude oil prices elevated, prompting travelers to consider ground transportation options — a tailwind for rental car demand.

Fleet Valuation Receives a Lift

Used car prices have climbed to multi-year highs, which directly benefits Avis. The company operates a large vehicle fleet, and higher used car values increase the worth of these assets on the balance sheet.

This combination — tighter rental demand, higher fleet values, and a heavily shorted stock — has created a powerful driver behind the recent price movement.

Barclays Issues a Cautious Warning

Not all investors are on board with the rally. Barclays has maintained its “sell” rating on the stock, describing the recent upward move as a “supply-demand mismatch.”

The bank pointed out that just two holders account for 71% of outright ownership, with over 100% of economic interest when outstanding swaps are included.

“All of these factors create uncertainty around how long this rally will last and whether CAR stock can continue to rise,” Barclays noted.

The bank also stated that the rally cannot be justified even when accounting for improvements in car market fundamentals.

The stock now trades well above most analyst price targets, a sign that technical trading forces are driving most of the recent price action.

On the fundamentals side, Avis reported a net loss of $889 million for full-year 2025 — a 51% improvement from the $1.82 billion loss in 2024.

Revenue fell 1.6% year-over-year to $11.6 billion.

In Q4 2025, the net loss came in at $747 million, down 61.8% from the $1.96 billion loss in the same period a year earlier. Q4 revenue dipped 1.7% to $2.66 billion.

CAR’s year-to-date gain of 374% makes it one of the standout market movers so far this year.

Despite Barclays’ cautionary warning, the stock closed Monday at $608.80.