Stock Analysis & Valuation Hertz Global Holdings, Inc. (HTZ)

• Previous Close: $4.90
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	36.03	635
Intrinsic value (DCF)	1.67	-66
Graham-Dodd Method		n/a
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Hertz Global Holdings, Inc. (NASDAQ: HTZ) is a leading global vehicle rental company operating under the Hertz, Dollar, and Thrifty brands. Founded in 1918 and headquartered in Estero, Florida, Hertz serves customers across the Americas, Europe, Asia, Australia, and other international markets through company-owned, licensee, and franchisee locations. The company offers traditional car rentals, as well as specialized services like Hertz 24/7 car sharing and the Firefly brand for budget-conscious travelers. As part of the Industrials sector and Rental & Leasing Services industry, Hertz plays a critical role in mobility solutions for both leisure and business travelers. Despite recent financial challenges, the company maintains a strong brand presence and a diversified fleet, positioning it as a key player in the competitive car rental market. With a focus on digital transformation and fleet optimization, Hertz continues to adapt to evolving consumer preferences in transportation.

Investment Summary

Hertz presents a high-risk, high-reward investment opportunity in the vehicle rental sector. The company's strong brand recognition and global footprint are offset by significant financial challenges, including substantial debt ($18.4 billion) and recent net losses (-$2.86 billion). The high beta (2.269) indicates significant volatility relative to the market. While operating cash flow remains positive ($2.22 billion), heavy capital expenditures (-$10.63 billion) reflect ongoing fleet investments. The lack of dividends and negative EPS (-$9.34) may deter conservative investors, but the company's market position and potential post-pandemic travel recovery could appeal to growth-oriented investors willing to assume higher risk. The transition to electric vehicles and digital platforms may offer long-term competitive advantages if successfully executed.

Competitive Analysis

Hertz operates in a highly competitive vehicle rental industry dominated by a few major players. The company's primary competitive advantage lies in its strong brand portfolio (Hertz, Dollar, Thrifty) and global presence across multiple market segments. Hertz has historically positioned itself as a premium brand, though its acquisition of Dollar and Thrifty has expanded its reach into value-conscious segments. The company faces intense competition on pricing, fleet quality, and customer service. Hertz's recent financial struggles have impacted its ability to invest in fleet modernization compared to better-capitalized competitors. The company's move toward electric vehicles (notably its Tesla fleet) represents a potential differentiator, though execution risks remain high. Digital transformation and the expansion of Hertz 24/7 car sharing services aim to address changing consumer preferences, but these initiatives require significant capital. Geographic diversification provides some insulation against regional economic fluctuations, but also exposes the company to international operational complexities. The high fixed-cost structure of the rental business makes profitability highly sensitive to fleet utilization rates, which remain volatile in the post-pandemic travel environment.

Major Competitors

• Avis Budget Group, Inc. (CAR): Avis Budget operates the Avis (premium) and Budget (value) brands, directly competing with Hertz's multi-brand strategy. With stronger recent financial performance, Avis has been more aggressive in fleet investment and technology upgrades. The company benefits from a more focused operational structure but lacks Hertz's international breadth in some markets.
• Expedia Group, Inc. (EXPE): While primarily an online travel agency, Expedia's car rental platform competes indirectly with Hertz by aggregating rental options. Expedia's strong digital presence and customer relationships create pricing pressure on traditional rental companies, though it lacks direct fleet ownership and operational control.
• Uber Technologies, Inc. (UBER): Uber's ride-hailing services represent a disruptive alternative to traditional car rentals, particularly for urban customers. While not a direct competitor for longer-term rentals, Uber's growth has impacted airport rental demand. Hertz has partnered with Uber to provide rental vehicles for drivers, creating a complex competitive dynamic.
• Lyft, Inc. (LYFT): Similar to Uber, Lyft's ride-sharing platform competes for short-term mobility needs. Lyft has been less aggressive than Uber in forming partnerships with rental companies, maintaining more purely competitive positioning against traditional rental services like Hertz.
• Getaround, Inc. (GETR): Getaround's peer-to-peer car sharing platform competes with Hertz's traditional rental model and 24/7 car sharing service. The asset-light model gives Getaround cost advantages, but Hertz benefits from fleet control and consistent quality standards across locations.