Why Avis Budget Group Stock Just Crashed
Key Points
Avis Budget Group took a massive write-down on its EVs last quarter, tumbling the shares for a loss.
Avis lost even more money in 2024 than in 2025, and might actually earn a profit in 2026.
Car rental company Avis Budget Group (NASDAQ: CAR) stock tumbled 21% through 10:40 a.m. ET Thursday after missing badly on its Q4 earnings report last night.
Heading into the report, analysts already weren't optimistic, expecting Avis to lose $0.19 per share on sales of $2.7 billion -- but the actual news was much worse. Avis reported a loss per share of $21.25, and on sales of less than $2.7 billion.
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Avis Budget Group Q4 earnings
What went wrong with Avis last quarter? In a nutshell, says the company, "we reviewed our ... United States electric vehicle ("EV") rental car vehicles, and ... shortened the useful life associated with such vehicles."
So something's wrong with Avis's EVs. Avis didn't say precisely what is wrong -- maybe the batteries are running down prematurely. Maybe the tech is evolving so rapidly that today's EVs will be obsolete a year from now. Or maybe Avis's customers just don't want to rent EVs, and so it must sell them off.
Whatever the reason, the company took $518 million in "long-lived asset impairment and other related charges," swelling its losses for both the quarter and the year. That accounted for 60% of the quarter's losses and more than half of the year's losses. (Per share, Avis lost $25.25 in 2025).
Is Avis Budget stock a sell?
The good news is that -- believe it or not -- these losses were still better than Avis's losses in 2024 ($55.56 for Q4 2024, and $51.23 for the year). The better news is that analysts forecast Avis will return to profitability and earn $9.66 per share this year.
At $97 per share, the stock only costs 10x forward earnings today. If you're feeling brave, now might be a good time to buy Avis stock.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.