HTZ is valued very cheaply, but its liquidity is falling below $1B. Whether the stock goes up depends on if it can hit its 2026 profit goals and what happens in
Hertz Global HTZ is trading at about 0.22x forward 12-month sales per share, versus 1.67x for the Zacks Transportation-Services industry, 1.58x for the Zacks Transportation sector, and 4.98x for the S&P 500. The gap is wide enough to matter for anyone hunting asymmetric upside.
Image Source: Zacks Investment Research
But the discount is also the market’s way of pricing in uncertainty. Hertz is still working through residual value volatility, elevated repair and insurance costs, and operational disruptions tied to recalls. Those factors have kept profitability negative and have made near-term forecasting harder.
That is why the multiple alone is not a catalyst. A re-rating usually requires evidence that the earnings bridge is working and that the balance sheet is not the constraint.
Liquidity is the gating variable because fleet purchases and timing swings can overwhelm the income statement. Hertz ended 2025 with about $1.5 billion of corporate liquidity, including roughly $565 million in cash and cash equivalents.
That cushion shrank after a $346 million make-whole payment in January 2026, taking liquidity to just under $1.2 billion. Management expects liquidity to trough below $1 billion by the end of the second quarter of 2026 as fleet investments peak.
The plan relies on active capital management. Hertz has executed financings expected to add roughly $200 million of liquidity and is evaluating additional opportunities totaling more than $500 million. The trade is simple: the more credible these actions look, the more room the stock has to respond to improving operations.
Timing matters because management is still guiding to negative margins in the near term. The March quarter adjusted EBITDA margin is expected to remain negative in the high single-digit to low double-digit range, even as it improves about 600 to 800 basis points year over year.
The “why later” case rests on depreciation and pricing discipline. Depreciation per unit improved meaningfully in 2025, and management expects depreciation per unit to fall below $300 in 2026 as mix and resale values improve.
Hertz is still maintaining a 3% to 6% adjusted EBITDA margin outlook for 2026 and a $1 billion adjusted EBITDA target for 2027. Until margins turn consistently positive, the market has a reason to keep the valuation compressed.
Fourth-quarter 2025 results showed both stabilization and reminders of what can go wrong. Revenue was essentially flat year over year at about $2.03 billion. Total revenue per transaction day slipped 1% to $55.67, and utilization ended at 78%.
Costs were a brighter spot. Adjusted direct operating expense per day fell 6% year over year to $36.39. Depreciation per unit was also a standout at $330 per month, reflecting better buying, holding and selling discipline through most of the year.
The caution is that quarter-specific items still distort the trend. Results were weighed down by a late noncash depreciation charge tied to a residual adjustment, plus seasonal defleeting that produced losses on vehicle sales. For a trading-oriented plan, the next catalysts should be observable in the operating metrics, not the narrative.
First, watch for sustained sequential improvement in revenue per transaction day, supported by tighter capacity discipline and continued upgrades to pricing systems. Second, monitor depreciation per unit with the goal of seeing it trend around $300 and build visibility toward sub $300 levels as 2026 progresses. Third, track recall normalization. Recalls sidelined more than 20,000 vehicles at the peak and pressured utilization, particularly in rideshare. Normalization should support both utilization and the cadence of vehicle sales.
Finally, the market will focus on whether liquidity actions keep the trough manageable and whether free cash flow improves after the March quarter, consistent with management’s cash-flow-neutral aim.
Hertz Global Holdings, Inc. price-consensus-eps-surprise-chart | Hertz Global Holdings, Inc. Quote
Hertz carries a Zacks Rank #3 (Hold), with Style Scores that fit a “prove it” setup. The Value score is A, but Momentum is D, reinforcing that the stock is cheap before it is loved. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A practical approach is to let the company earn a higher multiple through execution. Position sizing and entries can be tied to confirmation that pricing, depreciation and utilization are moving the right way, while liquidity stays within the expected range.
For context, Avis Budget Group, Inc. CAR is the closest publicly traded peer in U.S. car rental, so relative moves in pricing and residual trends can shape sentiment across the group. Another adjacent mobility indicator is Uber $UBER Technologies, Inc. UBER, whose driver-facing vehicle marketplace underscores how important rideshare demand can be for fleet utilization and channel mix.
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Avis Budget Group, Inc. (CAR): Free Stock Analysis Report
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