Avis Budget Group (CAR) Drops 3.00% Amid Fleet Strategy Impairment

Avis Budget Group (CAR) shares fell 3.00% today, reaching their highest level since February 2025, with an intraday gain of 1.36%.

The recent decline in Avis Budget Group's stock price can be attributed to several key factors. The company accelerated its fleet rotation strategy in Q4 2024, which shortened the useful life of most vehicles in its Americas segment, leading to a significant decline in recoverable value. Consequently, Avis Budget had to recognize billions of dollars in impairment charges, resulting in a $1.96 billion loss for Q4 2024. This was a stark contrast to the $259 million profit in the same period of the previous year. The disappointing financial results, announced on February 11, 2025, also led to a leadership change, with the CEO stepping down. These developments caused the stock price to fall by $6.12 per share, or nearly 7%, to close at $83.59 per share on February 11, 2025.

Additionally, multiple class action lawsuits and securities fraud investigations have been announced against Avis Budget Group, highlighting allegations that the company misled investors about its fleet rotation strategy and its financial implications. These legal actions have added to the uncertainty surrounding the company's future prospects, further impacting its stock price. The combination of financial setbacks and legal challenges has created a challenging environment for Avis Budget Group, as it works to regain investor confidence and stabilize its operations.