Avis Budget Group (CAR) Shares Soar 2.81% Amid Short Squeeze

Avis Budget Group (CAR) shares rose to their highest level since December 2023 today, with an intraday gain of 2.81%.

The strategy of buying CAR shares after they reached a recent high and selling after one week resulted in no return over the past five years. The strategy had a CAGR of 0.00% and an excess return of -57.67%, underperforming the benchmark significantly. Additionally, the strategy had a maximum drawdown of 0.00% and volatility of 0.00%, indicating a risk-averse approach but failing to generate any returns.

Avis Budget Group has been designated as a Zacks Rank #5 (Strong Sell), with concerns about its earnings and stock price volatility. Despite a significant stock price increase since March, driven largely by a short squeeze, strong buyback activity, and a tight used car market, the fundamentals appear weak. The company reported a significant EPS miss in Q1, with declining revenues and increased fleet costs. Analysts have lowered earnings estimates significantly, indicating potential challenges ahead.

The recent surge in stock price is partly attributed to news that Pentwater Capital now owns 19% of Avis Budget Group, which fueled a short squeeze. This development has added to the volatility and uncertainty surrounding the company's stock performance.

A sell signal was issued from a pivot top point on July 14, 2025, indicating potential further declines in stock price. This technical analysis suggests that the recent gains may not be sustainable, and investors should exercise caution.