Key Stats for Avis Budget Stock
- Current Price: $204.00
- TIKR Mid-Case Target: ~$113
- Potential Total Return (Mid): ~(44)%
- Annualized IRR (Mid): ~(12)% / year
- Street Target (Mean): ~$120
- Most Recent Earnings Reaction: (21.54%) on February 18, 2026
- Max Drawdown: (71.43%) on April 24, 2026
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What Happened?
Few stocks have moved as violently as Avis Budget Group (CAR) this month. The rental car operator spent most of early 2026 trading near $100, weighed down by a catastrophic Q4 2025 miss. Then a short squeeze sent it from roughly $146 at the end of March to an intraday peak of $847.70 on April 22.
In just two days, the stock cratered so deeply it wiped out nearly all of its 600% surge over the previous month, according to Bloomberg. CAR closed April 24 at $204.00, registering a max drawdown of 71.43%.
TSA staffing problems and airport disruptions provided the initial spark, with traders piling into rental car stocks alongside Hertz as travelers sought alternatives to chaotic airports. But the magnitude of the move came from market structure, not fundamentals.
Two hedge funds battled each other into a position where their combined economic exposure exceeded Avis Budget’s total shares outstanding, creating a structural squeeze with little connection to the underlying business. When Avis announced Q1 2026 earnings for April 29, the squeeze collapsed. JPMorgan downgraded the stock to Underweight the following session.
The fundamental picture that preceded the squeeze was already ugly.
CEO Brian Choi said directly on the February 19 Q4 2025 earnings call: “This was a difficult quarter. I’ve said before that delivering on quarterly results is foundational. And when operational performance speaks for itself, we earn the right to focus on the bigger picture. This quarter, we didn’t earn that right.”
The stock fell 21.54% the day those results were reported.
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Is Avis Budget Undervalued Today?
The short answer is no.
At $204, CAR sits well above what Wall Street or the TIKR model thinks it is worth. The Street’s mean price target is around $120, implying roughly 41% downside. The TIKR mid-case target is around $113 by 12/31/31.
The core problem is leverage. Avis carries roughly $28 billion in net debt against $748 million in actual 2025 EBITDA, producing a net debt-to-EBITDA ratio above 11x. Interest expense was $422 million in 2025, meaning a large share of operating earnings goes straight to debt service before shareholders see anything.
The Q4 2025 earnings call explained how the business deteriorated so fast. CFO Daniel Cunha laid out the approximately $150 million EBITDA miss as three simultaneous hits: roughly $40 million from weaker rental days and softer revenue per day (RPD, what the company earns per rental unit), about $60 million from higher vehicle depreciation and lower fleet sale gains, and around $50 million from a conservative reset of insurance reserves.
None of these were one-off structural fixes. They reflect how exposed the business is when demand, pricing, and fleet costs move against it at the same time.
Avis also recorded an approximately $500 million write-down on its EV fleet at year-end. The company monetized most of its Federal EV tax credits for $180 million in cash, then shortened the remaining useful life of its EV vehicles from 36 months to roughly 18 months, cutting monthly depreciation from around $600 to slightly above $300.
That improves the balance sheet going forward, but it does not generate revenue.
The recovery path is narrow. Consensus estimates project 2026 EBITDA recovering to around $827 million from $748 million in 2025, with revenue edging up from $11.65 billion to around $11.76 billion. Free cash flow is projected to remain negative at around $(120) million in 2026 before turning modestly positive at around $145 million in 2027.
That recovery assumes depreciation per unit normalizes from Q4 2025’s $338 monthly average toward the low $300s, RPD stabilizes, and Americas utilization improves. As Q4 demonstrated, none of those assumptions is guaranteed.
The earnings surprise history reinforces caution: four consecutive EBITDA misses relative to consensus heading into April 29. Analysts already expect another Q1 loss. What matters on earnings day is not the size of the loss but whether Choi’s fleet discipline and utilization improvements are showing up in the operating data.
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TIKR Advanced Model Analysis
- Current Price: $204.00
- TIKR Mid-Case Target: ~$113
- Potential Total Return (Mid): ~(44)%
- Annualized IRR (Mid): ~(12)% / year
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The TIKR mid-case model, realized at 12/31/31, prices CAR at around $113. That is a potential total return of around (44)% and a negative ~12% annualized IRR from today’s price. The model assumes a revenue CAGR of around 1%, driven by a gradual recovery in the Americas and steady international contributions. The net income margin in the mid-case is projected at around 2%, up from 0.2% reported in 2025, contingent on depreciation normalization and RPD stability.
The primary risk is leverage. With roughly $28 billion in net debt, another demand shock of the kind Q4 2025 delivered would materially worsen the trajectory. Even TIKR’s high case, which projects a stock price of around $81, still implies a loss of $204. No scenario in the model supports buying at today’s price.
Conclusion
The number to watch at Q1 earnings on April 29 is the monthly depreciation per unit in the Americas. Management guided for approximately $400 in Q1 as a deliberate reset, normalizing toward the low $300s through the rest of 2026. If that does not show up in the data, the case for EBITDA recovering above $1 billion becomes very difficult to support.
At $204, CAR still trades significantly above what the Street or the TIKR model believes the business is worth. The squeeze is over. The fundamentals have not changed.
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Should You Invest in Avis Budget?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up Avis Budget, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
You can build a free watchlist to track Avis Budget alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
