NYSE:HRI

Stock Analysis Report

Executive Summary

Herc Holdings Inc., together with its subsidiaries, operates as an equipment rental supplier primarily in the United States and internationally.

Rewards

Trading at 62.2% below its fair value

Earnings are forecast to grow 30.62% per year

Risk Analysis

Interest payments are not well covered by earnings

Large one-off items impacting financial results

Profit margins (2.3%) are lower than last year (13%)



Snowflake Analysis

Fair value with moderate growth potential.


Similar Companies

Triton International

NYSE:TRTN

Share Price & News

How has Herc Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: HRI has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.8%

HRI

0.9%

US Trade Distributors

2.0%

US Market


1 Year Return

29.1%

HRI

17.9%

US Trade Distributors

23.5%

US Market

Return vs Industry: HRI exceeded the US Trade Distributors industry which returned 22.3% over the past year.

Return vs Market: HRI exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

HRIIndustryMarket
7 Day0.8%0.9%2.0%
30 Day-8.8%0.3%4.3%
90 Day-1.6%10.0%12.2%
1 Year29.1%29.1%19.8%17.9%26.1%23.5%
3 Year6.6%6.6%29.4%23.8%53.1%43.2%
5 Yearn/a50.5%39.3%75.5%56.1%

Price Volatility Vs. Market

How volatile is Herc Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Herc Holdings undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HRI ($44.95) is trading below our estimate of fair value ($119.04)

Significantly Below Fair Value: HRI is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: HRI is poor value based on its PE Ratio (28.2x) compared to the Trade Distributors industry average (17x).

PE vs Market: HRI is poor value based on its PE Ratio (28.2x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: HRI is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: HRI is overvalued based on its PB Ratio (2.2x) compared to the US Trade Distributors industry average (1.7x).


Next Steps

Future Growth

How is Herc Holdings forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

30.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HRI's forecast earnings growth (30.6% per year) is above the savings rate (1.7%).

Earnings vs Market: HRI's earnings (30.6% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: HRI's revenue (4.4% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: HRI's revenue (4.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HRI's Return on Equity is forecast to be low in 3 years time (19%).


Next Steps

Past Performance

How has Herc Holdings performed over the past 5 years?

10.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HRI has a large one-off loss of $60.5M impacting its September 30 2019 financial results.

Growing Profit Margin: HRI's current net profit margins (2.3%) are lower than last year (13%).


Past Earnings Growth Analysis

Earnings Trend: HRI's earnings have grown by 10.3% per year over the past 5 years.

Accelerating Growth: HRI's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: HRI had negative earnings growth (-81.7%) over the past year, making it difficult to compare to the Trade Distributors industry average (-7.3%).


Return on Equity

High ROE: HRI's Return on Equity (7.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Herc Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: HRI's short term assets ($381.8M) do not cover its short term liabilities ($396.2M).

Long Term Liabilities: HRI's short term assets ($381.8M) do not cover its long term liabilities ($2.9B).


Debt to Equity History and Analysis

Debt Level: HRI's debt to equity ratio (379%) is considered high.

Reducing Debt: Insufficient data to determine if HRI's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: HRI's debt is well covered by operating cash flow (27.8%).

Interest Coverage: HRI's interest payments on its debt are not well covered by EBIT (1.8x coverage).


Balance Sheet

Inventory Level: HRI has a low level of unsold assets or inventory.

Debt Coverage by Assets: HRI's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is Herc Holdings's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage2.5%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate HRI's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate HRI's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if HRI's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if HRI's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of HRI's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Herc Holdings's salary, the management and board of directors tenure and is there insider trading?

2.3yrs

Average management tenure


CEO

Larry Silber (62yo)

4.7yrs

Tenure

US$4,827,763

Compensation

Mr. Lawrence H. Silber, also known as Larry, has been the Chief Executive Officer and President at Herc Rentals Inc. since May 14, 2015 and Herc Holdings, Inc. since May 21, 2015. Mr. Silber served as an I ...


CEO Compensation Analysis

Compensation vs Market: Larry's total compensation ($USD4.83M) is about average for companies of similar size in the US market ($USD3.86M).

Compensation vs Earnings: Larry's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.3yrs

Average Tenure

55yo

Average Age

Experienced Management: HRI's management team is considered experienced (2.3 years average tenure).


Board Age and Tenure

3.6yrs

Average Tenure

62yo

Average Age

Experienced Board: HRI's board of directors are considered experienced (3.6 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$1,144,52218 Nov 19
GAMCO Investors, Inc.
EntityCompany
Shares79,229
Max PriceUS$50.70
BuyUS$517,99818 Nov 19
GAMCO Investors, Inc.
EntityCompany
Shares16,859
Max PriceUS$50.17
BuyUS$4,50018 Nov 19
Associated Capital Group Inc, Asset Management Arm
EntityCompany
Shares100
Max PriceUS$45.00
BuyUS$22,50018 Nov 19
Gabelli & Company Investment Advisers, Inc.
EntityCompany
Shares500
Max PriceUS$45.00
BuyUS$538,32419 Jul 19
GAMCO Investors, Inc.
EntityCompany
Shares91,917
Max PriceUS$46.18
SellUS$618,23419 Jul 19
GAMCO Investors, Inc.
EntityCompany
Shares132,668
Max PriceUS$46.41
BuyUS$12,60008 Mar 19
Mary Salomone
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares300
Max PriceUS$42.00
SellUS$35,97131 Jan 19
Mario Gabelli
EntityIndividual
Shares1,000
Max PriceUS$35.97
BuyUS$031 Jan 19
GAMCO Investors, Inc.
EntityCompany
Shares504,438
Max PriceUS$36.90
SellUS$031 Jan 19
GAMCO Investors, Inc.
EntityCompany
Shares141,993
Max PriceUS$36.71
BuyUS$7,64131 Jan 19
Gabelli & Company Investment Advisers, Inc.
EntityCompany
Shares225
Max PriceUS$34.97

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Mark Irion (53yo)

    Senior VP & CFO

    • Tenure: 1.6yrs
    • Compensation: US$2.47m
  • Paul Dickard

    Vice President of Communications

    • W. Humphrey (47yo)

      VP, Controller & Chief Accounting Officer

      • Tenure: 2.8yrs
      • Compensation: US$895.60k
    • Maryann Waryjas (67yo)

      Special Counsel & Advisor to the CEO

      • Tenure: 0.3yrs
      • Compensation: US$1.52m
    • Larry Silber (62yo)

      President

      • Tenure: 4.7yrs
      • Compensation: US$4.83m
    • Chris Cunningham (57yo)

      Senior VP & Chief Human Resources Officer

      • Tenure: 3.6yrs
      • Compensation: US$1.04m
    • Elizabeth Higashi

      Vice President of Investor Relations

      • Samuel Sheek

        Senior VP

        • Tenure: 0.2yrs
      • Tamir Peres (49yo)

        Senior VP & Chief Information Officer

        • Tenure: 2.3yrs
        • Compensation: US$1.26m
      • Aaron Birnbaum

        Senior VP & COO


        Board Members

        • Nick Graziano (46yo)

          Independent Director

          • Tenure: 1.7yrs
          • Compensation: US$140.70k
        • Jean Holley (60yo)

          Independent Director

          • Tenure: 2.4yrs
          • Compensation: US$185.04k
        • Herb Henkel (70yo)

          Non-Executive Chairman

          • Tenure: 3.6yrs
          • Compensation: US$317.67k
        • Patrick Campbell (66yo)

          Independent Director

          • Tenure: 3.6yrs
          • Compensation: US$190.04k
        • Jack Katz

          Independent Director

          • Tenure: 2.4yrs
          • Compensation: US$185.04k
        • Mike Kelly (62yo)

          Independent Director

          • Tenure: 3.6yrs
          • Compensation: US$182.54k
        • Jim Browning (69yo)

          Independent Director

          • Tenure: 3.6yrs
          • Compensation: US$257.09k
        • Mary Salomone (59yo)

          Independent Director

          • Tenure: 3.6yrs
          • Compensation: US$190.04k
        • Larry Silber (62yo)

          President

          • Tenure: 4.7yrs
          • Compensation: US$4.83m
        • Louie Pastor (34yo)

          Independent Director

          • Tenure: 3.6yrs
          • Compensation: US$182.54k

        Company Information

        Herc Holdings Inc.'s company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Herc Holdings Inc.
        • Ticker: HRI
        • Exchange: NYSE
        • Founded: 1965
        • Industry: Trading Companies and Distributors
        • Sector: Capital Goods
        • Market Cap: US$1.325b
        • Shares outstanding: 28.82m
        • Website: https://ir.hercrentals.com

        Number of Employees


        Location

        • Herc Holdings Inc.
        • 27500 Riverview Center Boulevard
        • Suite 100
        • Bonita Springs
        • Florida
        • 34134
        • United States

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        HRINYSE (New York Stock Exchange)YesCommon StockUSUSDJul 2016
        H9B1DB (Deutsche Boerse AG)YesCommon StockDEEURJul 2016
        HRI *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJul 2016
        0J4LLSE (London Stock Exchange)YesCommon StockGBUSDJul 2016

        Biography

        Herc Holdings Inc., together with its subsidiaries, operates as an equipment rental supplier primarily in the United States and internationally. It rents aerial, earthmoving, material handling, trucks and trailers, air compressors, compaction, and lighting equipment; and provides ProSolutions, an industry specific solution based services, such as pumping solutions, power generation, climate control, remediation and restoration, and studio and production equipment. The company also sells used equipment and contractor supplies, such as construction consumables, tools, small equipment, and safety supplies; provides repair, maintenance, equipment management, and safety training services, as well as offers ancillary services, such as equipment transport, rental protection, cleaning, refueling, and labor. It serves non-residential and residential construction, specialty trade, restoration, remediation and environment, and facility maintenance contractors; industrial manufacturing industries, including automotive and aerospace, power, metals and mining, agriculture, pulp, paper and wood, food and beverage, and refineries and petrochemical industries; infrastructure and government sectors; and commercial and retail service, hospitality, healthcare, recreation, entertainment production, and special event management customers through its sales team, industry catalogs, as well as through participation and sponsorship of industry events, trade shows, and Internet. As of February 22, 2019, it operated approximately 270 locations in the United States, Canada, China, the United Kingdom, Saudi Arabia, and Qatar. Herc Holdings Inc. was founded in 1965 and is based in Bonita Springs, Florida. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/17 23:58
        End of Day Share Price2020/01/17 00:00
        Earnings2019/09/30
        Annual Earnings2018/12/31


        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.