Avis Budget Bears Rebuild After Q3 Print

CAR has just come through its Q3 earnings release with a story that is turning back in favour of the bears: short interest, which spent most of last week retreating, has reversed course and the ORTEX short score has pushed to its highest level in at least a fortnight.

Short interest climbed 6.5% over the week to 13.6% of the free float, with roughly 345,000 new shares added in a single session on November 3. That follows the sharp cover-down that preceded the Q3 print, where bears trimmed nearly 750,000 shares in five sessions. The post-earnings rebuild suggests the results did not resolve the debate: sellers who stood aside before the number are now leaning back in. The ORTEX short score reached 80.6 on November 3, ranking in the bottom 2nd percentile of the full stock universe on that measure. The borrow market has tightened meaningfully in parallel. Availability dropped to 97.8% from 143.5% a week ago, the fastest compression in months, with cost to borrow up 45% over the same period to 0.60%. That rate remains low in absolute terms, so this is a tightening market, not a squeeze. Options positioning offers little in the way of a contrary signal: the put/call ratio of 1.33 is marginally above its 20-day mean of 1.29, a z-score of just 0.64, leaving it well inside the range that would indicate acute defensive demand.

The Street is broadly aligned with the bears. Barclays cut its target to $115 from $160 on November 2, the day before results, keeping an Equal-Weight rating. JP Morgan held its Underweight in October and trimmed its target to $105. Morgan Stanley and Goldman Sachs are both rated Equal-Weight and Sell respectively, with targets at $95. The consensus mean sits at $116, only modestly above the current price of $109.34, leaving almost no cushion for a re-rating. Factor scores reinforce the scepticism: EPS momentum ranks in the 2nd percentile over 30 days and the 11th percentile over 90 days, while EPS surprise sits in the 25th percentile. The PE has expanded to 26.3x, up more than 6 points over the past 30 days, without a corresponding lift in earnings expectations. That multiple expansion into a deteriorating earnings momentum backdrop is the kind of setup the short community tends to exploit.

One structural fact worth noting is the ownership register. SRS Investment Management holds 49% of shares outstanding, an unusually concentrated single-holder position that limits the effective free float and amplifies any shift in the smaller institutional holders. Pentwater Capital trimmed its position by 4.5 million shares to 7.1% of shares in its last disclosed quarter. BlackRock, Goldman Sachs, and FMR have all reduced stakes in recent filings, though all are event-driven disclosures around the 5% threshold and holders dropping below that level may not file again. The insider record over the past 90 days shows net selling of approximately $652,000, with the most recent open-market transactions all coded as sales by the EVP/CDIO in August at prices well above current levels.

The stock closed at $109.34, down 1.95% on November 3, giving back some of the 7% weekly rally that preceded the results. Peer HTZ moved in the opposite direction, up 6.2% on the day, a divergence that may reflect different market reads on the Q3 numbers from each company's print. UHAL was broadly flat on the day, up 6.3% over the week.

The next scheduled earnings event is in February 2027, leaving the market roughly three months to decide whether the post-results short rebuild is conviction or noise. How quickly borrow availability tightens from here, and whether analyst targets continue to converge toward the lower end of the range, will be the key signals to track.