Why Avis Budget Group Stock Just Crashed

Car rental company Avis Budget Group (NASDAQ: CAR) banal tumbled 21% done 10:40 a.m. ET Thursday aft missing severely connected its Q4 net study past night.

Heading into the report, analysts already weren't optimistic, expecting Avis to suffer $0.19 per stock connected income of $2.7 cardinal -- but the existent quality was overmuch worse. Avis reported a nonaccomplishment per stock of $21.25, and connected income of little than $2.7 billion.

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What went incorrect with Avis past quarter? In a nutshell, says the company, "we reviewed our ... United States electrical conveyance ("EV") rental car vehicles, and ... shortened the utile beingness associated with specified vehicles."

So something's incorrect with Avis's EVs. Avis didn't accidental precisely what is incorrect -- possibly the batteries are moving down prematurely. Maybe the tech is evolving truthful rapidly that today's EVs volition beryllium obsolete a twelvemonth from now. Or possibly Avis's customers conscionable don't privation to rent EVs, and truthful it indispensable merchantability them off.

Whatever the reason, the institution took $518 cardinal successful "long-lived plus impairment and different related charges," swelling its losses for some the 4th and the year. That accounted for 60% of the quarter's losses and much than fractional of the year's losses. (Per share, Avis mislaid $25.25 successful 2025).

The bully quality is that -- judge it oregon not -- these losses were inactive amended than Avis's losses successful 2024 ($55.56 for Q4 2024, and $51.23 for the year). The amended quality is that analysts forecast Avis volition instrumentality to profitability and gain $9.66 per stock this year.

At $97 per share, the banal lone costs 10x guardant net today. If you're feeling brave, present mightiness beryllium a bully clip to bargain Avis stock.

Before you bargain banal successful Avis Budget Group, see this:

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