Herc Holdings (HRI) AI Stock Analysis

• Market Cap: $3.86B
• Dividend Yield: 2.38%
• Average Volume (3M): 615.25K
• Price to Earnings (P/E): 132.0
• Beta (1Y): 1.78
• Revenue Growth: 11.41%
• EPS Growth: -92.67%
• Country: US
• Employees: 7,600
• Sector: Industrials
• Sector Strength: 84
• Industry: Rental & Leasing Services
• EPS (TTM): 1.87
• Shares Outstanding: 33,236,565
• 10 Day Avg. Volume: 792,926
• 30 Day Avg. Volume: 615,254
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 3.57
• Enterprise Value/Revenue: 3.84
• Enterprise Value/Gross Profit: 16.35
• Enterprise Value/Ebitda: 13.24
• 1Y Price Target: $137.33
• Price Target Upside: 18.19% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 64 Neutral
• Price Target: $124.00 ▲(6.72% Upside)

Herc Holdings' overall stock score is driven by strong financial performance and positive corporate events, such as strategic acquisitions and divestitures. However, the stock faces challenges from bearish technical indicators and high valuation concerns. The earnings call provided a balanced view with both positive growth opportunities and notable challenges.

Positive Factors

Acquisition Growth

The acquisition accelerates the growth story and ensures Herc acquires one of the few quality firms of scale available in the rental space.

Earnings Growth

Herc's ability to capture deal synergies and realize outgrowth from solid mega project tailwinds provides a framework for a compelling earnings trajectory and margin expansion.

Valuation

Valuation is seen as attractive at current levels, with a strong case for multiple expansion as deal synergies are captured and debt is paid down.

Negative Factors

Execution Risks

The integration will be a substantial undertaking, at a time when Herc’s execution on flow through has been mixed.

Leverage Concerns

Herc's leverage remains at 2.5x at the end of 1Q25 and is expected to climb to 3.8x at the close of the H&E transaction.

Market Conditions

The general rental markets are soft with rate sensitive construction markets constrained.

Herc Holdings Business Overview & Revenue Model

Company Description

Herc Holdings Inc. (HRI) is a leading equipment rental supplier operating primarily in North America. The company provides a wide range of equipment rental services to various sectors including construction, industrial, government, and entertainment. Herc Holdings offers rental solutions for equipment such as aerial, material handling, earthmoving, and more, catering to both large-scale projects and smaller, specialized needs.

How the Company Makes Money

Herc Holdings generates revenue primarily through the rental of equipment to a diverse customer base across numerous industries. Their business model focuses on renting out a wide array of equipment, which includes both short-term and long-term rental agreements. The company also supplements its rental income with sales of new and used equipment, repair and maintenance services, and ancillary support services. Key revenue streams include rental fees, sales of equipment, and service charges for maintenance and logistics. Strategic partnerships with equipment manufacturers and suppliers help Herc Holdings maintain a robust inventory and meet customer demand, which is crucial for sustaining and growing its revenue.

Herc Holdings Financial Statement Overview

Summary

Herc Holdings shows strong revenue growth and operational efficiency, with robust gross and EBIT margins. However, profitability is under pressure, as indicated by declining net profit margin and ROE. The balance sheet is stable with an improving debt-to-equity ratio, but negative free cash flow in TTM could pose liquidity challenges moving forward.

Income Statement

Herc Holdings demonstrates strong revenue growth with a 25.3% increase in revenue from 2022 to TTM (Trailing-Twelve-Months). The gross profit margin remains robust at 49.6% in TTM. However, net profit margin has decreased to 3.7% in TTM from 6.3% in 2023, indicating some pressure on profitability. EBIT margin has improved significantly to 34.5% in TTM compared to previous years, showing better operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has improved, standing at 0.68 in TTM, indicating a healthy balance between debt and equity financing. ROE has decreased to 9.4% in TTM from 16.5% in 2023, reflecting reduced profitability relative to shareholders' equity. The equity ratio is stable at 17.6%, suggesting a solid equity base relative to total assets.

Cash Flow

Free cash flow is negative at -$13 million in TTM, signaling potential challenges in cash generation. The operating cash flow to net income ratio is strong at 7.70, suggesting efficient cash conversion from net income. However, free cash flow to net income ratio is negative, highlighting challenges in maintaining positive free cash flow.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.37B	3.28B	2.74B	2.07B	1.78B
Gross Profit	1.16B	1.22B	1.06B	756.00M	526.60M
EBITDA	1.36B	1.43B	1.19B	865.00M	653.10M
Net Income	211.00M	347.00M	330.00M	224.00M	73.70M
Balance Sheet
Total Assets	7.88B	7.06B	5.96B	4.49B	3.59B
Cash, Cash Equivalents and Short-Term Investments	83.00M	71.00M	53.50M	35.10M	33.00M
Total Debt	5.07B	4.48B	3.62B	2.47B	2.05B
Total Liabilities	6.48B	5.79B	4.85B	3.51B	2.85B
Stockholders Equity	1.40B	1.27B	1.11B	976.90M	742.00M
Cash Flow
Free Cash Flow	16.00M	-390.00M	-355.50M	102.20M	225.40M
Operating Cash Flow	1.23B	1.09B	916.70M	744.00M	610.90M
Investing Cash Flow	-1.51B	-1.58B	-1.68B	-961.30M	-207.50M
Financing Cash Flow	299.00M	512.00M	784.10M	219.60M	-406.00M

Herc Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 116.19
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HRI, the sentiment is Negative. The current price of 116.19 is below the 20-day moving average (MA) of 133.04, below the 50-day MA of 128.31, and below the 200-day MA of 160.05, indicating a bearish trend. The MACD of -3.79 indicates Positive momentum. The RSI at 39.19 is Neutral, neither overbought nor oversold. The STOCH value of 9.03 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HRI.

Herc Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MGRC	82 Outperform	$2.97B	11.75	23.85%	1.60%	8.78%	117.40%
WLFC	77 Outperform	$1.03B	8.86	19.97%	0.74%	30.08%	32.62%
HRI	64 Neutral	$3.86B	132.02	1.41%	2.38%	11.41%	-92.67%
WSC	62 Neutral	$4.62B	41.93	9.82%	0.55%	-2.34%	-37.24%
ALTG	60 Neutral	$241.96M	―	-73.72%	3.06%	-2.09%	-977.36%
Sector *	58 Neutral	HK$13.20B	4.34	-2.94%	5.79%	3.03%	-49.30%
HEES	56 Neutral	$3.47B	38.00	15.74%	1.16%	-3.52%	-46.60%

Herc Holdings Corporate Events

Herc Holdings Sells Cinelease Business to Zello

On July 31, 2025, Herc Holdings Inc. completed the sale of its Cinelease studio entertainment and lighting and grip equipment rental business to Zello, a private investment platform, for an initial cash consideration of $100 million. The proceeds from this sale will be used by Herc to repay indebtedness incurred under its credit facility, potentially improving its financial position.

The most recent analyst rating on (HRI) stock is a Hold with a $200.00 price target. To see the full list of analyst forecasts on Herc Holdings stock, see the HRI Stock Forecast page.

Herc Holdings Completes Acquisition of H&E Equipment

On June 2, 2025, Herc Holdings Inc. completed its acquisition of H&E Equipment Services, significantly enhancing its position in the North American equipment rental market. The acquisition, which involved a cash and stock transaction, strengthens Herc’s presence in key rental regions and expands its fleet and service capabilities, promising substantial growth and value creation opportunities. The transaction also led to the issuance of new credit facilities and senior notes to refinance existing debts and support the acquisition.

The most recent analyst rating on (HRI) stock is a Hold with a $155.00 price target. To see the full list of analyst forecasts on Herc Holdings stock, see the HRI Stock Forecast page.

Herc Holdings Grants Retention Awards to COO

On May 15, 2025, Herc Holdings Inc. granted special retention equity awards to its Chief Operating Officer, Aaron D. Birnbaum. The awards, valued at $1 million, were split equally between restricted stock units (RSUs) and performance stock units (PSUs), with specific vesting schedules and performance criteria tied to Average ROIC and REBITDA margin.

The most recent analyst rating on (HRI) stock is a Hold with a $155.00 price target. To see the full list of analyst forecasts on Herc Holdings stock, see the HRI Stock Forecast page.

Herc Holdings Announces Private Offering for Acquisition

On May 15, 2025, Herc Holdings Inc. announced a private offering of senior unsecured notes to finance its proposed acquisition of H&E Equipment Services, Inc. The offering includes $1,650 million of notes due 2030 and $1,100 million of notes due 2033, with proceeds to be used for the acquisition, redemption of H&E’s existing debt, and related expenses. If the offering does not close concurrently with the acquisition, proceeds will be held in escrow until conditions are met. Upon acquisition closure, the notes will be guaranteed by Herc’s subsidiaries, including H&E’s, enhancing Herc’s market position and financial strategy.

The most recent analyst rating on (HRI) stock is a Hold with a $155.00 price target. To see the full list of analyst forecasts on Herc Holdings stock, see the HRI Stock Forecast page.

Herc Holdings Announces Acquisition of H&E Equipment

On February 19, 2025, Herc Holdings Inc. announced a definitive agreement to acquire H&E Equipment Services, Inc. for $4.8 billion. This acquisition is expected to enhance Herc’s national scale, geographic diversification, and synergy opportunities, potentially accelerating its growth plans. The transaction will be financed through a mix of equity, an upsized revolving credit facility, a new term loan, and unsecured debt. The combined entity will have over 600 branches and a fleet valued at $10 billion, positioning Herc as a more significant player in the industry.

The most recent analyst rating on (HRI) stock is a Hold with a $155.0000 price target. To see the full list of analyst forecasts on Herc Holdings stock, see the HRI Stock Forecast page.