CAR heads into its July 28 earnings report with a sharply divided market — short sellers retreating, analysts still largely bearish, and the stock down 16% over the past month.
The most striking positioning shift is in short interest, and it tells a story of bears backing away. SI has fallen nearly 40% over the past month, dropping from roughly 7 million shares in mid-June to 4.25 million now, bringing it to 12.1% of the free float. The direction of travel is consistent — shorts have trimmed every week since late June. Borrow conditions reinforce the picture: cost to borrow has more than halved in a week to just 0.51%, and availability has loosened to 125%, meaning lenders have more shares available than are currently borrowed. The borrow market is no longer under any stress. Options, meanwhile, remain structurally defensive — the put/call ratio is running at 1.71, well above the 52-week low of 0.88, though it's barely above its own 20-day average and carries no meaningful z-score elevation. Put-heavy positioning is baked in for this name, not a fresh signal.
The analyst community is skeptical, and the divergence from the stock's recent trading history is the central tension. Goldman Sachs maintained a Sell on the stock just yesterday, raising its target to $95 — still 40% below the current price of $159.48. JP Morgan also holds an Underweight but has a more generous target at $170, raised last month. The consensus mean target is $138.86, implying the Street sees roughly 13% downside from here. Bulls can point to a Piotroski F-score of 8, strong EPS surprise history (70th percentile), and a momentum score that has climbed sharply over the past four weeks. Bears counter with the balance sheet: a negative price-to-book, an Altman Z-score of 0.62 — deep in distress territory — and an EV/EBITDA of nearly 35x for a capital-intensive car rental business. The 90-day EPS momentum rank of 86 is the one number that genuinely favours the bull case, suggesting estimate revisions have turned constructive even as the stock pulled back.
Ownership adds one notable wrinkle. Pentwater Capital, which was a 10% owner and the company's third-largest institutional holder, sold aggressively in April — offloading over 4.4 million shares between the institutional filing and insider transaction records. Its remaining stake is 2.59 million shares, down from over 7 million. That overhang has largely cleared, removing a structural source of supply pressure heading into the print.
The July 28 report is therefore less a test of whether Avis can grow revenues and more a question of whether margins and fleet costs are tracking in a direction that justifies a stock trading materially above where most of Wall Street thinks it should be.
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