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Just For You
Avis, CarMax, and Carvana: 3 Car Stocks Sharply DivergeReported by Leo Miller. Originally Published: 4/20/2026. 
Key Points
- Avis Budget Group is shooting to the moon as short sellers take big hits.
- CarMax remains down significantly as it loses market share.
- Meanwhile, Carvana is taking share, putting the stock heavily in the green over the past 52 weeks.
- Special Report: Elon’s “Hidden” Company
Car rental and used-car stocks are showing a wide divergence in performance. Three notable names across these industries are Avis Budget Group (NASDAQ: CAR), CarMax (NYSE: KMX), and Carvana (NYSE: CVNA). Their 52-week returns range from declines of roughly 30% to gains approaching 500%. Below, we break down what's driving these differences and what Wall Street analysts expect next. Avis Catapults on Suspected Short SqueezeOver the past 52 weeks, Avis Budget Group has surged more than 450%, approaching the 500% mark. Since the end of March alone, Avis shares rose over 200%, including nine single-day gains of 10% or more. Market observers largely attribute the explosive rally to a short squeeze.
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A short squeeze can occur when a large percentage of a company's float is held in short positions. If the stock rises, short sellers may rush to buy shares to cover losses, which pushes the price higher and can trigger more covering — a feedback loop that amplifies the rally. At the end of March, short interest was roughly 54% of Avis’s floated shares — an extremely high level that made the stock a prime squeeze candidate. More recent reports indicate short interest has since risen to 58%, suggesting new shorts have been added even as the stock climbed and that further squeezes remain possible. That said, betting on potential short squeezes is highly risky. Stocks driven by technical trading flows can fall as quickly as they rise because underlying fundamentals often don’t justify the valuation. For example, Avis’s revenue fell about 1% in 2025, yet the stock trades at a forward price-to-earnings ratio near 130X. Wall Street analysts remain skeptical: the MarketBeat consensus price target of $115 implies roughly 75% downside from current levels. CarMax Sees Large Drops After CEO Exit and Weak GuidanceBy contrast, vehicle reseller CarMax is down more than 30% over the past year, punctuated by several steep single-day declines. In November 2025, the stock plunged 24% after CarMax announced its CEO would step down and the company issued weak guidance. At the time, CarMax said comparable sales would decline 8% to 12% in its third quarter of fiscal 2026. (CarMax’s fiscal year runs ahead of the calendar year.) The company also guided to earnings per share (EPS) of $0.18 to $0.36, versus analyst expectations for a comparable sales drop near 3% and EPS above $0.60. CarMax ultimately reported a comparable sales decline of 9% and EPS of $0.43. Although those results were slightly better than the company’s midpoint guidance, the shares still fell. Even after CarMax later reported beats in April 2026, the stock dropped another 15%, reflecting lingering investor doubts about the company’s longer-term outlook. Analysts generally reflect that uncertainty. The MarketBeat consensus price target of $41.21 implies the stock is roughly fairly valued, but price targets updated after the latest report average about $35.50, implying more than 10% downside. Carvana Grows Retail Sales 43% While CarMax DeclinesMuch of CarMax’s deterioration coincides with Carvana’s rapid growth. CVNA is up more than 80% over the past year as the digital retailer gains market share from legacy used-car resellers. In 2025, Carvana sold 596,641 cars to retail customers, a 43% year-over-year increase. Over its fiscal 2026, CarMax sold 780,684 cars, a 1.1% decline year over year. A year earlier, Carvana sold just 416,348 retail vehicles versus CarMax’s nearly 789,050 — illustrating how Carvana’s customer base has rapidly expanded while CarMax’s has weakened. Unlike CarMax, which operates more than 250 traditional showrooms, Carvana has no physical retail stores. Transactions occur online: the company acquires cars from sellers, refurbishes them, and delivers them to buyers. Given the growth figures, Carvana’s online model appears to be resonating with consumers. Analysts are moderately bullish on Carvana. The MarketBeat consensus price target near $435 implies about 10% upside. However, several targets updated in April are lower; the April average of $411 suggests roughly 5% upside, with individual targets ranging from $335 to $475. Carvana’s Q1 2026 financials, due in late April, could prompt meaningful revisions to those forecasts. Avis Stands Apart; CarMax and Carvana Fight for ShareAvis Budget Group’s rally appears driven mainly by technical trading dynamics rather than changes in the rental market’s fundamentals. By contrast, CarMax and Carvana tell a story of disruption within the used-car resale market: Carvana is gaining share with an online-first model while CarMax faces slowing demand and leadership uncertainty. Carvana also has aggressive long-term targets: the company aspires to reach 3 million annual retail vehicle sales between 2030 and 2035, which would require sustained annual growth in the high teens to nearly 40% depending on the timeline. |
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