Avis Budget Group (CAR) Could Be 11% Undervalued Following Weak Q3 2026 Earnings

Q3 2026 earnings reset expectations for Avis Budget Group

Avis Budget Group (CAR) just put fresh numbers on the table. Third quarter 2026 results showed lower sales and a sharp drop in profit compared with the same period a year earlier.

The earnings miss has landed in a stock that is already under pressure. The share price is at $118.83 and the 1-year total shareholder return declined 16.61%. In the short term, momentum has picked up, with a 7-day share price return of 6.55% and a 30-day gain of 12.12%. This sits against a weaker 90-day share price return that fell 15.52% and a 5-year total shareholder return that dropped 54.34%.

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Avis Budget Group now trades close to estimates of fair value while still carrying a recent history of falling returns and a weaker quarter. Is the market being too harsh, or simply realistic about the risks?

Most Popular Narrative: 2% Overvalued

Avis Budget Group closed at $118.83, slightly above the $116.43 fair value implied by the analyst consensus Narrative on Simply Wall St. That estimate is tied to detailed assumptions about future premium services, digital rollouts and balance sheet repair.

The market may still be underestimating the impact of a smaller, tighter fleet that focuses on utilization and contribution margin. This is illustrated by record Q2 utilization, a 5% cut in Americas fleet with only a 2% fall in rental days and stabilizing RPD. Together these factors point to potential support for EBITDA and net margins even if headline revenue stays flat.

See why 10 investors see Avis Budget Group as 2% overvalued.

Result: Fair Value of $116.43 (OVERVALUED)

Still, the narrative around premium services at Avis Budget Group runs into two immediate hurdles: high net leverage of 7.4x and ongoing recall related costs already above US$50 million in 2026.

Find out about the key risks to this Avis Budget Group narrative.

Another View: SWS DCF Points To Undervaluation

The first valuation narrative pegs Avis Budget Group at around $116.43 and labels the stock slightly overvalued at $118.83. A different tool tells a different story. The SWS DCF model estimates a future cash flow value of $133.95, which frames Avis Budget Group as trading at an 11.3% discount. Which lens do you trust more when the signals conflict?

Look into how the SWS DCF model arrives at its fair value.

Next Steps

Mixed signals on Avis Budget Group and still not sure which way you lean. Act while the information is fresh and pressure test the 3 key rewards and 1 important warning sign.

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