Source: Alex Lavoie
Hertz Global Holdings, Inc. (NASDAQ:HTZ): A Prominent Player in the Car Rental Industry
As a well-known entity in the car rental market, Hertz Global Holdings, Inc. (NASDAQ:HTZ) is challenged by competition from major industry players such as Avis Budget Group and Enterprise Holdings. Despite the competitive landscape, the company’s financial results as of February 26, 2026, provide an insightful perspective on its current position and future trajectory.
Hertz’s financial performance is a critical indicator of its business health and potential for growth. Despite a volatile market environment, the firm has shown resilience and signs of potential growth.
Earnings Per Share (EPS): A Negative Surprise but Gradual Improvement
A key financial metric, earnings per share (EPS), provides insights into a company’s profitability. On this front, Hertz reported an EPS of -$0.60, underperforming the estimated EPS of -$0.51. This represents a negative EPS surprise of 18.11%, indicating a shortfall in profitability expectations.
However, it’s noteworthy that this is a substantial improvement from the previous year’s EPS of -$1.18. Thus, despite missing estimates, the company is showing a positive trend in reducing its losses, indicating potential for future profitability.
Revenue Performance: Beating Estimates with Operational Improvements
Revenue performance is another critical aspect of a company’s financial health. Here, Hertz displayed strength by posting a revenue of $2.03 billion for the quarter ending December 2025. This figure surpassed the estimated revenue of approximately $1.94 billion and the Zacks Consensus Estimate of $2.01 billion by 1.07%.
Even though there was a slight year-over-year decline of 0.6%, the superior-than-expected revenue performance indicates operational improvements and resilience in the face of industry-wide challenges in the Zacks Transportation – Services sector.
Investigating the Company’s Financial Structure
Hertz’s financial structure provides a more detailed picture of its current state. A negative price-to-earnings (P/E) ratio of approximately -1.83 points to ongoing losses. However, the picture is not entirely negative, as the price-to-sales ratio of 0.16 suggests the stock is undervalued relative to its sales. Additionally, the enterprise value to sales ratio stands at 2.03, providing further insight into the company’s valuation as compared to its revenue.
Liquidity and Debt: A Mixed Bag
On the liquidity front, Hertz boasts a healthy current ratio of 2.65, highlighting its strong capacity to cover short-term liabilities with its short-term assets. This ratio is a positive indicator of the company’s financial health in the short term.
However, the company’s capital-intensive model and negative free cash flow have led to a net debt of $16.5 billion, which raises concerns about its liquidity in the long run. Despite these concerns, management remains optimistic. They project mid-single-digit revenue growth for the current quarter, surpassing consensus estimates and signaling forward momentum in their commercial strategy.
Conclusion
Overall, despite some financial setbacks, Hertz Global Holdings, Inc. (NASDAQ:HTZ) displays signs of potential growth and resilience in a competitive industry. With improvements in earnings, revenue outperformance, and a healthy current ratio, the company is on a path towards financial improvement. However, the high level of net debt remains a concern that needs addressing. As the company navigates these challenges, investors will be keenly watching its future performance.