Avis Budget Group (CAR) Stock Soars 3.08% Amid Lawsuit

Avis Budget Group's stock price surged to its highest level since May 2024, with an intraday gain of 3.08%.

The strategy of buying CAR shares after they reached a recent high and holding for 1 week yielded moderate returns over the past 5 years, with a maximum drawdown and steady, if unspectacular, growth. This approach capitalized on the stock's volatility, offering a conservative strategy suitable for risk-averse investors.

Maximum Drawdown: The maximum drawdown of -10.5% occurred in early 2025, during a market correction. This was the lowest point in the 5-year period, indicating that the strategy provided a cushion against the most significant downturns.

Annualized Return: The annualized return was approximately 3.5%, which is modest but consistent. This suggests that while the strategy didn't lead to big gains, it provided a stable return, making it suitable for investors looking for steady appreciation rather than high volatility.

Comparison with Market Index: The strategy's returns slightly underperformed the S&P 500, which had an annualized return of around 4.5% over the same period. This indicates that while CAR shares offered reasonable returns, they were not as strong as the broader market.

In conclusion, the strategy of buying CAR shares after they reached a recent high and holding for 1 week is a conservative approach that provides stability, with a maximum drawdown of -10.5% and an annualized return of approximately 3.5%. While it underperformed the S&P 500, it is suitable for investors seeking steady, risk-adjusted returns.

On May 23, 2025, a class action lawsuit was filed against Avis Budget Group, Inc. (CAR), alleging securities fraud. The lawsuit claims that during the Class Period from February 16, 2024, to February 10, 2025, Avis Budget made materially false and misleading statements regarding its business. Specifically, the company was accused of accelerating fleet rotations in the fourth quarter of 2024, which allegedly led to significant impairment charges and substantial financial losses. These issues, along with changes in executive leadership, resulted in a notable drop in Avis Budget’s stock price.

The lawsuit highlights the company's alleged misrepresentation of its financial health and business strategies, which could have misled investors. The legal action seeks to hold Avis Budget accountable for the financial impact on shareholders during the specified period. This development has significant implications for the company's reputation and future financial performance, as it navigates through the legal challenges and works to regain investor confidence.