Avis Budget Group (CAR) reported Q2 2026 earnings that missed estimates, with lower revenue and fewer rental days. Tighter fleet management supported adjusted EBITDA growth and led management to reaffirm full year adjusted EBITDA guidance.

The latest Q2 report lands after a tougher stretch for Avis Budget Group’s stock, with the share price down 21.45% over the past 90 days and 10.80% over the past month, even though the year to date share price return is positive at 7.72%.

Compare how Avis Budget Group stacks up against hand picked car rental and travel peers by scanning the list of solid balance sheet and fundamentals (51 results) on Simply Wall St before you move on.

The recent slide in Avis Budget Group’s stock lines up with softer Q2 trading, yet management is still backing its full year profit targets. So is the current share price reflecting the business, or just sentiment?

Most Popular Narrative: 7% Overvalued

The most followed narrative puts Avis Budget Group’s fair value at $129.14, which is below the last close of $138.12. That gap rests on some very specific growth and margin assumptions.

The launch and rapid scaling of Avis First, a premium rental offering, could be fueling expectations of significant revenue and margin expansion, as investors anticipate a sustained uplift in average revenue per day (RPD) and market share capture from price-insensitive travelers. This optimism may not fully account for competitive responses or changing customer preferences, increasing the risk that future revenue and net margin improvements fall short of current valuations.

Read the complete narrative. Read the complete narrative.

Want to see what underpins that fair value for Avis Budget Group? The narrative leans heavily on a return to profitability, firmer margins and a specific future earnings multiple. The full set of assumptions is where the story really gets interesting.

Result: Fair Value of $129.14 (OVERVALUED)

However, if Avis First scales successfully or the Waymo partnership gains traction faster than expected, that could challenge the idea that Avis Budget Group is overvalued.

Another View on Avis Budget Group’s Valuation

The analyst narrative suggests Avis Budget Group is about 7% overvalued at $138.12 based on future earnings and a 10.5x P/E in 2029. Yet on a simple P/S basis of 0.4x, compared with 1.3x for the US Transportation industry and 2.0x for peers, the stock screens as inexpensive versus both.

Even against an estimated fair ratio of 0.7x, that discount is wide, which could reflect concern about leverage, legal headlines or earnings risk rather than just mispricing. The question for you is whether those issues justify the gap, or if the market is overshooting on caution.

Next Steps

With mixed signals around Avis Budget Group, it helps to move quickly and test the story against the full data set yourself. To weigh both the concerns and the potential upside in one place, walk through the 3 key rewards and 2 important warning signs.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.