Hertz Global Holdings (NASDAQ:HTZ) stock is down 7% in midday trading, slipping from $6.99 to less than $6.50. Avis Budget Group (NASDAQ:CAR) stock is also retreating 7%, moving from $411.56 to $382 and change. Both car rental names are pulling back together after an extraordinary multi-week run fueled by short squeeze dynamics.
The selloff arrives after a parabolic climb in both stocks. Avis Budget Group surged 308% in recent weeks. Hertz rose 80% over the same stretch. Today’s move is the first meaningful sign that the squeeze momentum may be losing steam.
We covered the early stages of this rally in our April 7 report on heavy call buying and short squeeze chatter in both names. The question now is whether today’s pullback is a brief pause or the beginning of a more serious unwind.
Avis Budget Group: A Wild Run Meets Gravity
Avis Budget Group’s run has been remarkable by any measure. The stock is up 197% year-to-date, driven almost entirely by short squeeze mechanics rather than a fundamental re-rating of the business.
The fundamentals tell a complicated story. Avis Budget Group reported Q4 FY2025 EPS of -$21.25, a massive miss against the -$0.23 estimate, weighed down by a $518 million EV fleet impairment charge. Revenue came in at $2.66 billion, missing the $2.75 billion estimate. CAR stock shed 22% after that February earnings release before the squeeze took hold.
Analyst consensus sits at a target price of $106.43, implying the stock is dramatically disconnected from where Wall Street believes the business is worth. Of 8 analysts covering the stock, 5 rate it Hold and 1 rates it Sell, with only 2 Buy ratings. Avis Budget Group CEO Brian Choi guided for 2026 Adjusted EBITDA of $800 million to $1 billion, which gives the bulls a fundamental anchor, but the current price reflects something far beyond that guidance.
The float is razor thin at just 10,142,900 shares, which is what makes the squeeze so violent in both directions. Retail traders remain polarized on CAR stock: aggressive momentum buyers on one side, and those convinced the valuation is completely detached from reality on the other.
Hertz: Turnaround Story Gets Caught in the Crossfire
Hertz has been trading in sympathy with Avis Budget Group throughout the squeeze, and today’s pullback follows that same pattern. HTZ stock is currently below $6.50 but still well above its 52-week low of $3.775 and up 26% year-to-date.
Hertz’s own fundamentals are a mixed picture. Q4 FY2025 EPS came in at -$0.72, missing the -$0.50 estimate, while revenue of $2.03 billion edged past the $2.00 billion estimate. The full-year FY2025 net loss narrowed significantly to $747 million from $2.86 billion in 2024, a sign that CEO Gil West’s Back-to-Basics turnaround strategy is producing real results.
The company’s Q3 2025 earnings were a landmark moment. Hertz posted EPS of $0.42, crushing the $0.07 estimate, marking the first GAAP profitability in two years. HTZ stock surged 37% after that report, which helped attract the short squeeze attention that carried into 2026.
That said, the balance sheet remains a serious concern. Hertz carries roughly $17 billion in total debt and negative stockholders equity of $459 million. The analyst consensus target of $4.333 for HTZ stock sits well below today’s price, with 6 Hold ratings, 1 Sell, and 2 Strong Sell ratings from covering analysts. The float of 125,934,000 shares is larger than Avis Budget Group’s, which means the squeeze dynamics are less extreme but still meaningful.
What to Watch
Watch for whether today’s selling in HTZ and CAR accelerates into the close or stabilizes near current levels. A decisive break below the intraday lows in either name could signal that short sellers are regaining control after weeks of pain.
The broader question for both stocks is whether any fundamental catalyst can justify prices this far above analyst targets. Absent a major positive development, momentum alone rarely holds indefinitely at these levels.
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