Hertz (HTZ): Assessing Valuation After New Initiatives and Pershing Square’s Investment Boost

If you have been watching Hertz Global Holdings (HTZ), the past month has probably caught your eye. The company isn’t just rolling out new customer programs; it’s shaking up its business on several fronts. Recent initiatives include expanding Rent2Buy to more than 100 cities, aiming to make car rentals more accessible, and launching the Gold Squad to put customer experience at the forefront. Add in a promising jump in digital lead conversions thanks to virtual showroom technology for its Public Carriage Office program and a new stake from institutional heavyweight Pershing Square Holdings, and you get a clear signal that momentum is building.

These moves seem to be resonating with investors. Over the past month, Hertz’s stock price climbed 16%, a strong move in the context of a 67% gain for the year so far, easily outpacing broader market returns. Recent improvements in digital sales and high-profile investor interest help to reinforce the company’s narrative of a turnaround, even as three-year returns remain deeply negative and long-term results still reflect the aftermath of previous challenges.

The big question now, as shares run higher on this wave of optimism, is whether there is real value left for new buyers or if the market has already priced in Hertz’s fresh growth prospects.

Most Popular Narrative: 52% Overvalued

According to the most widely followed narrative, Hertz Global Holdings is seen as significantly overvalued at its current price relative to analysts’ consensus expectations of the company’s future performance and risks. The narrative reflects a strong belief that recent positive momentum may have pushed the share price beyond what the company’s fundamentals justify today.

Disruptive mobility trends and alternative transport solutions threaten to reduce demand for traditional rentals, shrinking Hertz's core market and revenue prospects. Financial pressures from debt, fleet costs, and modernization needs constrain flexibility and jeopardize future profitability amid rising competitive and operational challenges.

Don’t just skim the headlines. Dig into the numbers. The story behind this valuation hinges on some surprising forward-looking assumptions. Want to know what bold financial leaps and future industry shifts are baked into analysts’ calculations? Uncover which critical factors are driving this price target and why so many believe the stock may be priced for perfection.

Result: Fair Value of $4.01 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, a younger and more reliable fleet, along with Hertz's push into digital partnerships, could drive stronger margins and challenge the current overvaluation narrative.

Find out about the key risks to this Hertz Global Holdings narrative.

Another View: Value Signals from Sales Ratios

While analysts argue Hertz Global Holdings is overvalued based on earnings forecasts, a closer look at its price-to-sales ratio tells another story. By that measure, Hertz currently trades well below the industry average. Could the market be missing hidden value, or are the risks too great to ignore?

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding Hertz Global Holdings to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Hertz Global Holdings Narrative

If you see the story differently or would rather dig into the details yourself, you can shape your own view in just a few minutes. Do it your way.

A great starting point for your Hertz Global Holdings research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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