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Hertz Global (HTZ)
NASDAQ:HTZ
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Hertz Global
(NASDAQ:HTZ)
41Neutral
Positive Factors
Earnings
HTZ had a directionally more positive earnings call than it has had in some time.
Fleet Management
HTZ is planning for a smaller fleet in 2025 and is letting go of some lower margin business, which could provide fundamental support.
Fleet Refresh
HTZ has shown incremental progress on its fleet refresh and reduced the risk of future liquidity strain with recent debt financing.
Negative Factors
Debt and Liquidity
HTZ signaled that it will likely return to the capital markets to boost liquidity, indicating potential additional debt.
Financial Performance
The 3Q results were below forecast when normalizing for the impact of the asset impairment.
Market Share
HTZ will likely cede some market share as it balances its liquidity position with the need to refresh the fleet.
Hertz Global (HTZ) vs. S&P 500 (SPY)
Market Cap
$1.06B
Dividend YieldN/A
Average Volume (3M)7.04M
Price to Earnings (P/E)―
Beta (1Y)1.50
Revenue Growth-3.44%
EPS Growth-581.59%
CountryUS
Employees26,000
SectorIndustrials
Sector Strength70
IndustryRental & Leasing Services
Share Statistics
EPS (TTM)-9.34
Shares Outstanding306,833,830
10 Day Avg. Volume11,511,317
30 Day Avg. Volume7,042,999
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.12
Price to Cash Flow (P/CF)0.60
P/FCF Ratio0.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$3.08Price Target Upside-10.47% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering4
Hertz Global Business Overview & Revenue Model
Company DescriptionHertz Global Holdings, Inc. operates as a vehicle rental company. It operates through two segments, Americas Rental Car and International Rental Car. The company provides vehicle rental services under the Hertz, Dollar, and Thrifty brands from company-owned, licensee, and franchisee locations in the United States, Africa, Asia, Australia, Canada, the Caribbean, Europe, Latin America, the Middle East, and New Zealand. It also sells vehicles; and operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets. Hertz Global Holdings, Inc. was founded in 1918 and is headquartered in Estero, Florida.
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 experiencing significant financial challenges, including declining revenue, negative profitability, and high leverage. The income statement shows a concerning trend with decreased revenue and negative profit margins. The balance sheet highlights financial leverage risks due to substantial liabilities and minimal equity. Although operating cash flow is positive, negative free cash flow and high capital expenditures impact liquidity.Income Statement
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.40
Negative
Balance Sheet
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.30
Negative
Cash Flow
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.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| 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
Negative
3.44
Price Trends
4.04
Negative
3.93
Negative
3.69
Negative
Market Momentum
-0.19
Positive
40.05
Neutral
20.78
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HTZ, the sentiment is Negative. The current price of 3.44 is below the 20-day moving average (MA) of 3.88, below the 50-day MA of 4.04, and below the 200-day MA of 3.69, indicating a bearish trend. The MACD of -0.19 indicates Positive momentum. The RSI at 40.05 is Neutral, neither overbought nor oversold. The STOCH value of 20.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $39.63B | 6.84 | 13.42% | 7.50% | 5.00% | 35.92% | |
70 Outperform | $5.18B | 10.51 | 10.81% | 3.27% | -0.70% | -7.27% | |
66 Neutral | $11.39B | 30.23 | 5.61% | ― | 0.98% | -35.16% | |
65 Neutral | $6.06B | 12.81 | 15.71% | 2.22% | 7.25% | 25.82% | |
62 Neutral | $8.27B | 14.03 | 2.36% | 3.08% | 3.85% | -14.32% | |
41 Neutral | $1.06B | ― | -176.39% | ― | -3.44% | -581.59% | |
41 Neutral | $2.13B | 8.26 | 78.26% | ― | -1.82% | -219.91% |
* Industrials Sector Average
Performance Comparison
HTZ
Hertz Global
3.44
-4.43
-56.29%
UHAL
Amerco
63.72
-1.61
-2.46%
CAR
Avis Budget
60.66
-57.87
-48.82%
F
Ford Motor
10.25
-1.31
-11.33%
LEA
Lear
96.60
-41.04
-29.82%
R
Ryder System
145.15
31.90
28.17%
Hertz Global Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -19.25% | Next Earnings Date: Apr 24, 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.Highlights
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.
Lowlights
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.