Avis Budget (CAR) Stock Plummets 17% Following Disappointing First Quarter Results

Key Takeaways

• First quarter loss reached $8.01 per share, exceeding analyst projections of a $7.29 loss
• Quarterly revenue reached $2.53 billion, representing a 4.3% increase year-over-year and surpassing forecasts
• Shares declined approximately 15-17% during Wednesday’s premarket session
• CAR stock has plummeted more than 70% from its April 21 short squeeze peak of $713.97
• Free cash flow on an adjusted basis showed improvement of over $570 million versus the prior year period

Avis Budget Group delivered first-quarter financial results that fell short of analyst projections, triggering a sharp decline in share price during premarket hours on Wednesday and compounding an already challenging period for shareholders.

The car rental giant recorded a GAAP loss of $8.01 per share in the first quarter, underperforming the Street’s consensus forecast of $7.29 by $0.51. Despite missing expectations, the result marked progress compared to the $14.35 per share loss reported in the same quarter last year.

The company generated $2.53 billion in quarterly revenue, marking a 4.3% climb from the year-ago period and exceeding analyst estimates of $2.4 billion.

Avis Budget Group, Inc., CAR

Shares of CAR dropped between 15-17% in premarket activity to approximately $151-$155, positioning the stock for a sixth consecutive trading session in the red.

While the earnings shortfall applies additional pressure, the more significant narrative centers on the dramatic collapse from the stock’s recent short squeeze surge.

CAR experienced a meteoric rise beginning in late March, fueled by intense call option activity from momentum-focused funds and speculative traders targeting a stock with substantial short interest. The shares reached an all-time closing peak of $713.97 on April 21.

From that high point, the stock has surrendered over 70% of its value as the technical dynamics driving the squeeze have reversed course.

Operational Figures Display Modest Progress

Beyond the headline loss figure, certain operational metrics pointed to incremental improvements.

Revenue per day, adjusted for currency fluctuations, increased 3% across both the Americas and International operating segments. Vehicle utilization rates topped 70% in each segment.

Adjusted EBITDA registered at negative $113 million, versus negative $93 million in the first quarter of the previous year, indicating a slight widening of losses on this metric.

Adjusted free cash flow totaled $80 million, representing an improvement exceeding $570 million compared to Q1 2025. The company reported liquidity of $915 million at quarter end, complemented by $2.9 billion in available fleet funding capacity.

Executive Commentary

Chief Executive Officer Brian Choi characterized the quarter as representing a pivotal shift in operational performance.

“We executed on the changes we outlined last quarter, and the first quarter reflects a meaningful inflection in our operating performance,” Choi stated.

“With tighter fleet discipline, improving pricing, and stronger utilization, we are building a more resilient business with clear momentum heading into the rest of the year,” he continued.

Management emphasized enhanced fleet management discipline and improved pricing strategies as critical drivers of operational progress.

Competitor Hertz Global (HTZ) also experienced weakness in early trading, declining approximately 1.1% in the premarket session.

As of the premarket trading activity, CAR was changing hands near $151, representing a decline exceeding 70% from its April 21 high-water mark.