Hertz Global Holdings Inc (HTZ)

History and Background

Hertz Global Holdings Inc. was founded in 1918 as Rent-a-Car Inc. It was renamed Hertz Drive-Ur-Self System in 1923 and became Hertz Corporation in 1953. It has gone through several ownership changes, including periods under RCA, Ford, and private equity firms. It filed for bankruptcy in 2020 due to the pandemic and emerged in 2021.

Core Business Areas

• Car Rental Services: Offers a wide range of vehicles for rental, including cars, trucks, and vans, catering to leisure and business travelers. Hertz operates through its brands Hertz, Dollar, Thrifty and Firefly.
• Fleet Management: Provides fleet management services to businesses.
• Sales and Leasing: Engages in the sales and leasing of vehicles.

Leadership and Structure

Stephen Scherr is the current CEO. The company has a typical corporate structure with a board of directors and various executive leadership roles overseeing different business functions.

Key Offerings

• Car Rental: Mainstream car rental services offered under the Hertz, Dollar, and Thrifty brands. Hertz is recognized as the premium brand and Dollar and Thrifty are the value brands. Enterprise, Avis, and Budget are primary competitors. Market share varies, and it is difficult to obtain precise real-time data, but it's estimated to be around 25% as of 2024 based on brand recognition and fleet size.
• Hertz Gold Plus Rewards: Loyalty program offering expedited rental services and rewards. It aims to increase customer loyalty and direct bookings. Competitors include Enterprise Plus, Avis Preferred, and similar programs from other rental agencies. User numbers and specific revenue figures for this specific product are proprietary, but its strategic value is in customer retention and lifetime value.
• Fleet Solutions: Offers fleet management solutions to corporate clients and governmental agencies. Ryder, Penske, and ARI are some of the major competitors. This is not the primary focus, revenue is not publicly available.

Industry Overview

The car rental industry is highly competitive and cyclical, influenced by economic conditions, travel trends, and fuel prices. Increased competition from ride-sharing services and the growth of electric vehicle adoption are notable trends. The industry is experiencing rapid digitalization and innovation of rental platforms and vehicle distribution

Positioning

Hertz positions itself as a leading car rental company with a diverse fleet and global presence. It aims to differentiate itself through technology, customer service, and brand recognition. The advantages include an established brand and a large fleet, but the disadvantages are large debts and high operational costs.

Total Addressable Market (TAM)

The global car rental market size is expected to reach $131.01 billion in 2029. Hertz is positioned to capture a significant portion of this, but needs to effectively manage its debt and fleet, while innovating with services such as electric vehicle rentals.

Key Competitors

• CAR
• AVIS
• BUD

Competitive Landscape

Hertz faces intense competition from Enterprise (CAR), Avis Budget Group (AVIS/BUD), and ride-sharing services. It must leverage its brand recognition and fleet size while improving its financial stability and adapting to changing consumer preferences.

Donlen Corporation

• Year: 2011
• Acquisition Price (USD millions): 950
• Strategic Rationale: Acquisition to expand fleet management services.

Historical Growth: Growth has been inconsistent, with periods of expansion followed by financial difficulties, particularly around the pandemic.

Future Projections: Future growth projections are dependent on the company's ability to execute its turnaround plan, manage its debt, and capitalize on opportunities in the electric vehicle rental market. Analyst estimates vary.

Recent Initiatives: Recent strategic initiatives include fleet electrification, cost-cutting measures, and focusing on customer experience improvements.

Hertz is a well-known brand but carries a significant amount of debt. While it possesses a strong market presence and opportunities in the growing electric vehicle market, it faces challenges from competitors and economic uncertainties. Their electrification strategy is bold but needs effective financial oversight. Navigating debt management, improving profitability, and adapting to competitive pressures are crucial.

Data Sources:

• Company filings
• Industry reports
• Market research reports
• Analyst estimates

Disclaimers:

This analysis is based on publicly available information and analyst estimates, which are subject to change. This is not financial advice; consult with a financial professional before making any investment decisions.