Avis Budget Group Plunges 15.5%—What Strategic Shockwave Shook the Mobility Giant?

Summary
• Avis announces multi-year partnership with Waymo for Dallas autonomous ride-hailing
• Q2 2025 revenue flat at $3.0B, net income of just $5M
• Stock slumps 15.49% to $172.30, intraday range 167.65–183.62

The market’s sharp reaction to Avis Budget Group’s (CAR) 15.5% drop underscores a collision of optimism and skepticism. While the Waymo partnership signals a bold pivot to autonomous mobility, weak Q2 earnings and a -6.05 PE ratio reveal undercurrents of operational strain. With the stock trading near its 52W low of $54.03, the question is whether this is a buying opportunity or a warning shot.

Waymo Pact and Earnings Underperformance Fuel Volatility
Avis’ 15.5% intraday collapse reflects a dissonance between strategic ambition and financial reality. The Waymo partnership—positioning Avis as a fleet operations partner for Dallas autonomous ride-hailing—has been hailed as a transformative move. However, Q2 results exposed fragility: $3.0B revenue was flat YoY, while net income of $5M (vs. $14M in Q2 2024) and a -6.05 dynamic PE ratio signal margin compression. Analysts are questioning whether the partnership’s long-term potential can offset near-term profitability challenges, particularly as the public launch is not until 2026.

Bearish Options Play and Key Technical Levels
• 200-day average: 103.27 (far below current price)
• 50-day average: 179.18 (resistance)
• RSI: 75.22 (overbought, hinting near-term reversal)
• MACD: 14.74 vs. signal line 15.66 (bearish crossover forming)

The stock’s technicals and fundamentals align for a bearish setup. Key support levels at 169.66 (Bollinger Lower Band) and 167.5 (psychological round number) are critical. If CAR breaks below 167.5, the 52W low of $54.03 becomes a tail-risk concern.

Top Options Picks:
• CAR20250815P170 (Put, Strike: $170, Expiry: 2025-08-15)
- IV: 62.71% (high)
- Leverage: 27.07% (aggressive)
- Delta: -0.3677 (moderate sensitivity)
- Theta: -0.082157 (time decay manageable)
- Turnover: 265,812 (liquid)
- Payoff (5% down to $163.69): $6.31/share (max profit if CAR < $170)
- Why: High leverage and liquidity make this put ideal for capitalizing on a breakdown below 170.

• CAR20250815P167.5 (Put, Strike: $167.5, Expiry: 2025-08-15)
- IV: 72.07% (elevated)
- Leverage: 25.88% (aggressive)
- Delta: -0.3415 (moderate sensitivity)
- Theta: -0.1247 (higher time decay)
- Turnover: 43,800 (liquid)
- Payoff (5% down to $163.69): $3.81/share (max profit if CAR < $167.5)
- Why: Combines high IV with liquidity for a leveraged bet on a sharp drop.

Action: Aggressive bears target CAR20250815P170 into a breakdown below $170. Cautious bears consider CAR20250815P167.5 for a 167.5 support test.

Backtest Avis Budget Group Stock Performance
The conclusion is derived from the backtest data where the market exhibited a positive performance after an intraday plunge of -15%. The maximum return following this event was 0.82% on day 59, indicating a modest but positive rebound.

Avis at Crossroads: Will Waymo Salvage the Stock or Deepen the Slide?
The stock’s 15.5% drop reflects market skepticism about Avis’ ability to monetize its Waymo partnership while maintaining profitability. While the 52W low looms as a psychological barrier, the 200-day average of $103.27 remains a distant tail risk. Investors should watch for a breakdown below 167.5, which could trigger a cascade to 160. For now, the bearish options chain and technical indicators suggest a short-term focus on risk management. Watch for 167.5 support or Uber’s (-0.57%) performance as sector sentiment barometer.