Car rental giant Hertz Global Holdings Inc. has emerged from Chapter 11 bankruptcy and is thriving in the post-pandemic travel recovery. The company has seen strong financial results, with GAAP net profits of $196 million and a 13% increase in revenue in Q1 2023. Hertz’s focus on electric vehicles has also paid off, with 10% of its rental fleet now consisting of EVs and a forecast of nearly 2 million EV rentals in 2023.
Key Points
1. Hertz is thriving in the travel recovery, posting strong financial results after emerging from Chapter 11 bankruptcy.
2. The company is increasing its electric vehicle rental fleet and has partnerships with Tesla and Uber to expand its offerings.
3. Hertz’s stock chart shows a potential breakout or breakdown as it approaches the apex point of its descending triangle pattern.
Car rental giant Hertz Global Holdings Inc. has successfully emerged from Chapter 11 bankruptcy, benefiting from the recovery in travel demand. The company has seen significant growth and is thriving in the post-pandemic era. Activist investor Dan Loeb has increased his holdings at Third Point to 6.35 million shares, indicating his confidence in Hertz’s future prospects.
In the first quarter of 2023, Hertz posted GAAP net profits of $196 million, representing a 13% revenue growth to $2.05 billion. This strong performance can be attributed to the rebound in the travel industry. Hertz’s electric vehicles (EVs) now constitute 10% or 50,000 of its car rental fleet, and the company expects to see nearly 2 million EV rentals in 2023. This shows its commitment to sustainability and the growing popularity of EVs among consumers.
Shares of HTZ are trading at a price-to-earnings ratio of 7X, marking a 16% year-to-date increase. However, there is a 14% short interest in the stock, indicating that some investors are betting against Hertz’s success. Despite this, Hertz’s strong financial performance and strategic initiatives have positioned it for further growth in the market.
Hertz’s emergence from bankruptcy has been a significant milestone for the company. Throughout the bankruptcy process, it continued to operate its rental services, ensuring continuity and stability for its customers. The recovery in travel demand has also been observed in other sectors such as airlines and lodging platforms, highlighting the overall recovery in the travel industry.
Hertz has focused on expanding its EV rental fleet through partnerships with companies like Tesla and Uber. It plans to further expand its offerings and partnerships, including bringing its Uber EV program to Europe. The company also aims to revitalize its Dollar and Thrifty brands and enhance its digital booking experience. Additionally, Hertz has been increasing the disposition of its used cars through retail channels and Carvana.
The company’s financial results for the first quarter of 2023 were impressive, with an adjusted earnings-per-share profit of $0.39, surpassing analyst estimates. Revenues for the quarter rose by 13.1% year-over-year to $2.05 billion. Hertz’s strong operating cash flow and share buyback program demonstrate its commitment to maximizing shareholder value.
Hertz CEO Stephen Scherr acknowledged the strength of the travel recovery and highlighted the opportunity for growth in international inbound travel. He also emphasized the company’s focus on EVs, with 10% of its rental car fleet being electric. Hertz aims to increase its EV rentals to nearly 2 million in 2023, demonstrating its commitment to sustainability and meeting the growing demand for EVs.
In terms of stock performance, HTZ’s weekly candlestick chart indicates the formation of a descending triangle pattern. There have been attempts to break out from this pattern, but the stock has faced resistance and experienced pullbacks. Currently, HTZ shares are approaching the apex point where a breakout or breakdown is expected to occur. The weekly RSI suggests a neutral stance, with support levels identified at various price points.
While Hertz Global has a “Moderate Buy” rating among analysts, it is worth noting that there are other stocks that top-rated analysts believe are better options for investment. These five stocks have been recommended by analysts and are expected to outperform the broader market.
In conclusion, Hertz Global Holdings Inc. has successfully recovered from bankruptcy and is thriving in the post-pandemic era. Its strong financial performance, focus on EVs, and strategic initiatives position the company for further growth. However, investors should carefully consider their investment options and explore alternative stocks recommended by top-rated analysts.
