Hertz Global Holdings, Inc. Just Reported A Surprise Profit And Analysts Updated Their Estimates
Shareholders will be ecstatic, with their stake up 43% over the past week following Hertz Global Holdings, Inc.'s (NASDAQ:HTZ) latest second-quarter results. It was overall a positive result, with revenues beating expectations by 5.2% to hit US$2.4b. Hertz Global Holdings also reported a statutory profit of US$0.20, which was a nice improvement from the loss that the analysts were predicting. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from Hertz Global Holdings' eight analysts is for revenues of US$9.19b in 2026. This would reflect a satisfactory 3.2% increase on its revenue over the past 12 months. Per-share losses are predicted to creep up to US$0.83. Before this latest report, the consensus had been expecting revenues of US$9.10b and US$1.08 per share in losses. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a very promising decrease in losses per share in particular.
Check out our latest analysis for Hertz Global Holdings
Even with the lower forecast losses, the analysts lowered their valuations, with the average price target falling 36% to US$2.78. It looks likethe analysts have become less optimistic about the overall business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Hertz Global Holdings at US$5.50 per share, while the most bearish prices it at US$1.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hertz Global Holdings' past performance and to peers in the same industry. The analysts are definitely expecting Hertz Global Holdings' growth to accelerate, with the forecast 6.5% annualised growth to the end of 2026 ranking favourably alongside historical growth of 4.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Hertz Global Holdings is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Hertz Global Holdings analysts - going out to 2028, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 4 warning signs for Hertz Global Holdings (2 shouldn't be ignored!) that you should be aware of.
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