Hertz Global (HTZ) AI Stock Analysis

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Hertz Global

(NASDAQ:HTZ)

55Neutral

Hertz Global's overall stock score is influenced by significant financial challenges, including declining revenue and high leverage. Despite positive cash flow, the negative equity and profitability issues are concerning. Technical analysis indicates strong upward momentum, but caution is warranted due to overbought indicators. Valuation is weak, with a negative P/E ratio and no dividend yield. The earnings call outlines strategic improvements, but financial and cost challenges remain substantial.

Positive Factors

Capital Opportunities

The rise in HTZ shares could give the company more flexibility to use the equity markets.

Investment

Pershing Square acquired a 19.8% stake in Hertz Global (HTZ), making it the second largest shareholder.

Market Reaction

HTZ shares climbed 56% after the news broke, driven by short covering.

Negative Factors

Capital Needs

HTZ will need to raise $500mm+ in additional capital.

Macroeconomic Uncertainty

There is meaningful macroeconomic uncertainty, and HTZ is likely to cede market share.

Operational Challenges

The stand-alone business is saddled with operational challenges and debt.

Hertz Global (HTZ) vs. S&P 500 (SPY)

Market Cap

$2.06B

Dividend YieldN/A

Average Volume (3M)27.60M

Price to Earnings (P/E)―

Beta (1Y)0.64

Revenue Growth-3.44%

EPS Growth-581.59%

CountryUS

Employees26,000

SectorIndustrials

Sector Strength79

IndustryRental & Leasing Services

Share Statistics

EPS (TTM)-9.34

Shares Outstanding307,901,550

10 Day Avg. Volume52,981,793

30 Day Avg. Volume27,603,466

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap9.19

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit-75.29

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$2.93

Price Target Upside-56.14% Downside

Rating ConsensusModerate Sell

Number of Analyst Covering4

Hertz Global Business Overview & Revenue Model

Company DescriptionHertz Global Holdings, Inc. is a leading global car rental company that provides vehicle rental services through its Hertz, Dollar, and Thrifty brands. Founded in 1918 and headquartered in Estero, Florida, Hertz operates in multiple sectors including airports, off-airport locations, and international markets. The company offers a wide range of vehicles for rent including cars, SUVs, trucks, and luxury vehicles, catering to both leisure and business travelers.

How the Company Makes MoneyHertz Global makes money primarily through its vehicle rental services, which are categorized into two main segments: U.S. Rental Car and International Rental Car. Revenue is generated from rental fees, additional service charges such as insurance, fuel purchase options, GPS rentals, and premium vehicle upgrades. The company also earns from fleet leasing and vehicle sales, particularly through its Rent2Buy program which allows customers to purchase cars directly from Hertz. Significant partnerships with travel agencies and corporate clients, as well as its loyalty programs, contribute to its revenue streams. Seasonal demand fluctuations, fleet management efficiency, and operational cost control are key factors influencing its earnings.

Hertz Global Financial Statement Overview

Summary

Hertz Global is facing significant financial challenges with declining revenue, negative profitability, and high leverage. While operating cash flow remains positive, substantial liabilities and negative equity pose financial stability risks. The company needs to address revenue decline and leverage to improve its financial health.

Income Statement

Negative

Hertz Global's income statement reveals challenges with declining revenue, negative gross profit, and a significant net loss in the TTM. The gross profit margin has turned negative, and the net profit margin is also negative. Revenue has decreased by 3.44% from the previous year, indicating a concerning trend. The company shows a negative EBIT margin and a positive EBITDA margin, suggesting operational struggles but some ability to generate earnings before non-cash charges.

Balance Sheet

Negative

The balance sheet shows a high debt-to-equity ratio due to substantial liabilities and minimal equity, indicating financial leverage risk. Stockholders' equity has decreased significantly, impacting the equity ratio negatively. The TTM return on equity is negative, reflecting the substantial net loss. Overall, the balance sheet highlights a risky financial position with potential solvency concerns.

Cash Flow

Neutral

Cash flow analysis shows an increase in operating cash flow compared to net income, indicating an ability to generate cash despite net losses. However, free cash flow remains negative due to high capital expenditures, affecting the company's liquidity. The free cash flow to net income ratio is negative, highlighting cash generation struggles. Despite these issues, the company maintains positive operating cash flow.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
9.05B	9.37B	8.69B	7.34B	5.26B
	Gross Profit
-251.00M	1.73B	3.03B	2.72B	-401.00M
	EBIT
-1.07B	756.00M	2.07B	2.06B	-1.06B
	EBITDA
1.84B	3.64B	3.84B	1.35B	1.04B
	Net Income Common Stockholders
-2.86B	616.00M	2.06B	366.00M	-1.72B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.13B	774.00M	943.00M	2.26B	1.10B
	Total Assets
21.80B	24.61B	22.50B	19.78B	16.91B
	Total Debt
16.34B	17.83B	15.66B	12.42B	7.90B
	Net Debt
15.20B	17.07B	14.72B	10.16B	6.81B
	Total Liabilities
21.65B	21.51B	19.85B	16.81B	16.82B
	Stockholders Equity
153.00M	3.09B	2.65B	2.98B	56.00M
Cash Flow		Free Cash Flow
2.22B	-7.23B	-8.21B	-5.42B	-4.69B
	Operating Cash Flow
2.22B	2.47B	2.54B	1.81B	953.00M
	Investing Cash Flow
-2.93B	-4.02B	-4.23B	-3.54B	4.59B
	Financing Cash Flow
658.00M	1.31B	487.00M	2.85B	-5.37B

Hertz Global Technical Analysis

Technical Analysis Sentiment

Positive

Last Price6.68

Price Trends

50DMA

4.80

Positive

100DMA

4.41

Positive

200DMA

3.95

Positive

Market Momentum

MACD

0.87

Positive

RSI

55.34

Neutral

STOCH

11.04

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HTZ, the sentiment is Positive. The current price of 6.68 is above the 20-day moving average (MA) of 6.16, above the 50-day MA of 4.80, and above the 200-day MA of 3.95, indicating a bullish trend. The MACD of 0.87 indicates Positive momentum. The RSI at 55.34 is Neutral, neither overbought nor oversold. The STOCH value of 11.04 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HTZ.

Hertz Global Risk Analysis

Hertz Global disclosed 50 risk factors in its most recent earnings report. Hertz Global reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Hertz Global Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
R	69 Neutral	$5.98B	12.66	16.41%	2.17%	6.21%	47.05%
Sector *	64 Neutral	$4.28B	11.80	5.33%	250.46%	4.10%	-9.26%
HRI	61 Neutral	$3.27B	15.53	9.60%	2.32%	8.34%	-63.02%
CTOS	59 Neutral	$928.55M	―	-3.76%	―	-3.37%	-156.92%
HEES	56 Neutral	$3.33B	36.43	15.74%	1.21%	-3.52%	-46.60%
HTZ	55 Neutral	$2.06B	―	-176.39%	―	-3.44%	-581.59%
CAR	51 Neutral	$3.38B	8.26	78.26%	―	-1.82%	-219.91%

* Industrials Sector Average

Performance Comparison

HTZ

Hertz Global

6.68

1.53

29.71%

CAR

Avis Budget

96.17

-25.31

-20.83%

HEES

H&E Equipment Services

90.72

43.04

90.27%

HRI

Herc Holdings

116.20

-29.28

-20.13%

Ryder System

144.71

21.70

17.64%

CTOS

Custom Truck One Source

4.10

0.22

5.67%

Hertz Global Earnings Call Summary

Earnings Call Date:Feb 13, 2025

(Q4-2024)

% Change Since: 56.81%|

Next Earnings Date:May 12, 2025

Earnings Call Sentiment Neutral

The earnings call highlights significant progress in fleet transformation and operational improvements, which are positive. However, financial losses, depreciation challenges, and cost headwinds such as insurance reserve increases and lease liabilities are notable concerns. Overall, while there are promising initiatives underway, the financial performance and cost issues create a balanced view.

Q4-2024 Updates

Positive Updates

Fleet Transformation Progress

Over 60% of the fleet was comprised of vehicles 1 year old or less by year-end 2024, and Hertz remains on track to substantially complete fleet rotation by year-end 2025. Fleet utilization improved year-over-year for the first time in 2024.

Operational Improvements and Strategic Additions

The company has strengthened its team with notable hires, such as Chris Berg as Chief Administrative Officer and Doria Holbrook as EVP of Mobility, to enhance execution capabilities. Significant progress has also been made in customer satisfaction with a 60-point improvement in service recovery scores.

Liquidity Position and Capital Structure

Hertz ended 2024 with a liquidity position of $1.8 billion and completed a $500 million capital raise, improving financial flexibility.

Negative Updates

Financial Performance Challenges

Revenue for Q4 was over $2 billion, but with an adjusted EBITDA loss of $357 million. Revenue decreased by 7% year-over-year due to a decrease in volume.

Depreciation and Loss on Vehicle Sales

MMR values dropped below forecasted levels, causing a book value loss on vehicle sales in Q4. This led to depreciation per unit (DPU) being above the top end of the range.

Cost Headwinds

Insurance reserves increased significantly in Q4, pushing direct operating expenses higher than usual. Also, post-impairment lease liabilities resulted in a higher non-cash increase in expenses.

Company Guidance

In the fourth quarter of 2024, Hertz Global Holdings provided several key metrics during their earnings call, highlighting the company's efforts to navigate a challenging year and set a foundation for future success. The company reported a revenue of just over $2 billion and an adjusted EBITDA loss of $357 million, attributed largely to a 7% year-over-year decrease in volume. Despite these challenges, Hertz made significant progress in fleet management by selling 100,000 vehicles in Q4, up from just over 30,000 in Q4 2023, and achieving a fleet utilization improvement of 270 basis points between Q3 and Q4. Moreover, they completed a capital raise of $500 million to enhance liquidity, bringing their total liquidity position to $1.8 billion by year-end. The company also emphasized their strategic focus on achieving a sub-$300 depreciation per unit (DPU) by year-end 2025 and improving customer satisfaction, with Net Promoter Scores showing strong gains. Looking forward, Hertz projected a low single-digit EBITDA margin for 2025, with a seasonal EBITDA loss in Q1, breakeven in Q2, and profitability in the latter half of the year.

Hertz Global Corporate Events

Executive/Board Changes

Hertz Global’s Chief Accounting Officer Resigns

Neutral

Mar 18, 2025

On March 12, 2025, Kelly Galloway, Senior Vice President and Chief Accounting Officer of Hertz Global Holdings, Inc., announced her resignation to pursue an opportunity outside the company. She will continue in her role until the filing of the quarterly report for the period ending March 31, 2025, after which Scott M. Haralson, the Executive Vice President and Chief Financial Officer, will take over as the principal accounting officer.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.