Avis Budget Group is the latest car company to get its very own speculative run. đââī¸ đââī¸ Shares of $CAR traded up over 200% intraday. The company can thank its beefy earnings, but the real action came after executives had something to share about EVs in their earnings call.
Avis Budget reported net income of $674 million ($10.45/per share in EPS) on its $3.0 billion in revenue. Unsurprisingly, this almost doubled YoY (most people didn’t have anywhere to be in 2020 anyway.)Â
These figures were starkly above analysts’ best guesses for the rental company â the company beat revenue by 8% and EPS by 60.9%. That’s one way to kill the shorts … and oh, were there many. đģ According to Ortex, the estimated short interest was 28.8% of float. In other words, roughly three out of ten shares were reported to be sold short.
If earnings and short interest were gasoline, then comments during the company’s earnings call about EV purchases were the lighter that set this speculative frenzy ablaze. đĨ đĨ The company’s executives made vague comments, insinuating that Avis would increase EV purchases. Chief Executive Office Joseph Ferraro suggested that Avis Budget would play a “big role” in bringing EVs to the masses.
But how big will that big role be? We’ll have to see … but they’ll be competing with Hertz, which announced it would order 100,000 Tesla Model 3 vehicles to expand its own EV fleet. It has already began taking deliveries of the vehicles, despite puzzling comments by Tesla’s Elon Musk indicating that “no contract has been signed yet.” đ¤