TLDR
- CAR stock surged 10% to $235, driven by heavy call buying and short squeeze dynamics
- The stock is up 118% over the past month, with a thin float of just 13.05 million shares
- Hertz (HTZ) rose 8% to $5.70 on the same options-driven momentum
- Wall Street remains bearish with a consensus “Reduce” rating and an average price target of $115
- Avis reported a Q4 FY2025 EPS of -$21.25, weighed down by a $518M EV impairment charge
Avis Budget Group (CAR) had a wild Tuesday. The stock moved from $212.60 to as high as $235 in midday trading — a 10% jump fueled almost entirely by options activity and short squeeze mechanics.
It’s the latest chapter in a month-long run that has seen CAR gain 118% heading into today’s session. The stock also hit a fresh 52-week high of $214.84 before pushing even higher.
Hertz (HTZ) joined the rally, climbing 8% from $5.31 to $5.70 on similar call buying activity. The two rental car names move together often — same sector, same debt-heavy structure, same short interest profile.
The setup in CAR is textbook squeeze territory. When heavy call buying hits a thinly traded stock, market makers have to hedge by buying the underlying, which pushes the price up, which attracts more traders, which creates more hedging pressure. Repeat.
CAR has a float of just 13.05 million shares and only 35.26 million shares outstanding. That’s a small pool. When short interest collides with aggressive call buying in a name this tight, the moves can be violent.
What the Bulls and Bears Are Arguing
The bullish case is simple: momentum, historical squeeze patterns, and a belief that the pain trade is still higher.
The bears have more data. Avis reported a Q4 FY2025 EPS of -$21.25, a massive miss against the -$0.23 estimate. The company carries $6.1 billion in corporate debt and has negative shareholders’ equity of -$3.129 billion. A $518 million EV impairment charge hit the quarter hard.
Wall Street’s analyst consensus sits at “Reduce” with an average price target of $115 — less than half today’s trading price. Goldman Sachs has a $85 target. Morgan Stanley is at $97. Barclays cut to $95. Deutsche Bank moved to Hold with a $128 target.
That disconnect between price and analyst targets is exactly what’s keeping the squeeze alive. Bears staying short means they’ll eventually need to buy shares to cover — and that’s free fuel for the bulls.
Insider and Institutional Activity
Not everyone is running from the stock. Pentwater Capital Management bought 425,000 shares in February at an average of $94.26 per share, a transaction worth $40 million and an 11.9% increase in its position.
Insiders own 52.8% of the company, and institutional ownership sits at 96.35%.
In a separate move, Avis announced an at-the-market equity offering allowing it to sell up to 5 million shares — a deal that previously knocked the stock 10% when announced.
Avis’s 50-day moving average is $116.57 and its 200-day moving average is $130.71, both well below current trading levels.
The stock has a market cap of $7.50 billion and a beta of 1.94, reflecting just how volatile this name can be.
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