Avis Budget Group Lost $995 Million Last Year. Its Stock Just Rallied 16% in a Day.
NEW YORK, April 7 —
Avis Budget Group (CAR) replaced its CEO after posting a $995 million net loss for 2025, driven by a massive write-down on its electric vehicle fleet.
- $11.7bn in TTM revenue, down 1% YoY. Net loss of $995mn after $2.5bn in EV fleet impairment charges.
- Stock trades at $212.6 on a 30.6x forward P/E — a steep multiple for a company with negative shareholder equity of $3.1bn.
- 2026 Adjusted EBITDA guidance: $800mn to $1bn, up from $748mn in 2025. That range either justifies the valuation or exposes it.
What Actually Happened
Joe Ferraro, a 45-year company veteran, stepped down as CEO effective June 30, 2025. Brian Choi took over on July 1. Choi served as CFO from 2020 to 2024, then as Chief Transformation Officer. He came to Avis from SRS Investment Management, the activist fund that held a board seat. This is not a caretaker pick. It is an activist-bred operator handed the keys to a fleet operation that just destroyed $2.5bn in shareholder value.
The EV impairment tells the story. Avis bought heavily into electric vehicles. Residual values collapsed faster than the batteries depleted. The company shortened useful life assumptions on its U.S. EV fleet and took a $518mn long-lived asset impairment in Q4 alone, on top of earlier charges. CFO Izzy Martins also left. Daniel Cunha replaced her. That is a full C-suite reset in one cycle.
The Catch
The balance sheet is the problem nobody on the bull side wants to discuss. Total debt sits at roughly $25bn, including vehicle program financing. Shareholder equity is negative $3.1bn. Interest coverage is razor-thin: 0.7x EBIT. The current ratio is 0.72 — short-term liabilities exceed short-term assets. This company has to continuously refinance its fleet debt while rates stay elevated.
The stock surged over 16% in a single session on April 1. The catalyst: TSA staffing disruptions boosted rental car demand. That kind of move on an external event — not company fundamentals — shows how much of this stock trades on sentiment. A 30.6x forward P/E on a capital-intensive fleet business with negative equity prices in a turnaround that has not started.
Bottom Line
New CEO Choi has the right résumé for the job. He is an activist investor who already knew where the problems were before he sat in the chair. The $800mn to $1bn EBITDA guidance for 2026 says management believes the fleet cost problem is fixable. Per-unit fleet costs are expected to drop from $400 in Q1 to $320-$330 for the full year. If they hit the top end, the valuation starts to work. If they miss, the debt load makes this a dangerous place to own shares.
The number to watch: per-unit fleet cost in Q1 2026 results. That single metric will show whether the EV hangover is clearing or getting worse.
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