The average target price of HTZ is 3.6 and suggests 53% downside potential. Usually, this means a SELL recommendation among investment firms, or a recommendation to decrease one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 6.0. This is lower than the current market price, meaning that even the most optimistic analyst does not see upside potential. On the other hand, the most pessimistic analyst has a target price of 2.7. This is equivalent to 65% downside potential in the worst case. 

Hertz Global Holdings, Inc. engages in the vehicle rental business through the Hertz, Dollar, and Thrifty brands. It operates under the Americas Rental Car (RAC) and International Rental Car (RAC) segments. The Americas RAC segment focuses on operations in the United States, Canada, Latin America, and the Caribbean. The International RAC segment includes the provision of rental and sales of vehicles and value-added services in other locations. The company was founded in 1918 and is headquartered in Estero, FL.

Hertz Global Holdings, Inc.

Financial Services

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

HTZ reported revenue of USD 8 782mn in the last 12 months, down 3% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 9% from FY24 to USD -10.17. Market expects EPS to reach USD -4.03 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 87ppts over past six months and grown 19ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

The company has reported good EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 11.9% in the last 12 months, a decline from 38.6% in FY23. 

Historically, HTZ has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -35.5%, down from 6.6% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to -14.6%, below the peers. The consensus estimate for FY24 for RoCE is -26.2%, again behind the peers. 

Another important profitability metric, return on assets (RoA), amounted to -13.4% in the last 12 months, a decrease from 2.6% in FY23. The market analysts predict that RoA will be -13.2% in FY24, again weaker than its peers. 

Hertz Global Holdings, Inc. reported a return on equity (RoE) of -220.4% in the last 12 months, down from 21.5% in FY23. The market consensus projects an RoE of -104.7% in FY24, again behind its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -0.5 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

HTZ boasts high trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is unstable and remains extremely favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to slow historical revenue growth, negligible return on capital, excessive margin volatility, weak debt servicing capacity, and an unfavourable capital structure. We note robust profitability, among the positive credit factors. 

In highly turbulent market conditions, HTZ is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, HTZ is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

From both historical and forecast perspectives, the stock is moderately underpriced compared to similar stocks. Specifically, the stock is neutral on EV/EBITDA. 

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Hertz Global Holdings, Inc.

$ 7.9

2

Hertz Global Holdings, Inc.

$ 7.9

2

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$ 7.9

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