Hertz Global Holdings Inc (HTZ)

Comprehensive Overview of Hertz Global Holdings Inc. (HTZ)

Company Profile:

Detailed History and Background

Hertz Global Holdings Inc. (HTZ), formerly known as Hertz Corporation, is a leading car rental company with over 100 years of history. Founded in 1918, Hertz has played a significant role in revolutionizing the car rental industry. In 2021, Hertz emerged from Chapter 11 bankruptcy, restructuring its operations and debt. It currently operates in over 100 countries and territories, offering various car rental and mobility solutions.

Core Business Areas

1. Car Rental: Hertz's primary business lies in car rental services, offering a diverse fleet of vehicles ranging from economy cars to luxury vehicles. They cater to both leisure and business travelers and offer additional services like car sharing and airport pick-up/drop-off. 2. Equipment Rental: Hertz also provides equipment rental services through its Hertz Equipment Rental Corporation subsidiary. This business segment offers a wide range of equipment, including construction equipment, tools, and power generators.

Leadership Team and Corporate Structure

Executive Leadership:

• Stephen Scherr: Executive Chairman
• Kathy Marinello: Interim CEO
• Matt VanDyke: Chief Financial Officer

Corporate Structure: Hertz operates under a decentralized structure with separate divisions for its car rental and equipment rental businesses. It also has international operations, managed through regional headquarters.

Top Products and Market Share:

Top Products:

• Standard car rentals
• Luxury car rentals
• SUV rentals
• Truck rentals
• Equipment rentals

Market Share:

• Global car rental market share: 7.9% (2022)
• US car rental market share: 17.9% (2022)

Product Performance and Market Reception: Hertz faces stiff competition from rivals like Enterprise and Avis. However, it enjoys a strong brand reputation and recognition, particularly in the US market. Hertz's recent focus on customer experience, technology, and fleet renewal has seen positive market reception.

Total Addressable Market:

The global car rental market was valued at $101.8 billion in 2022 and is projected to reach $163.1 billion by 2028, growing at a CAGR of 8.3%. This growth is driven by rising tourism, urbanization, and increasing demand for flexible transportation options. The US car rental market is expected to reach $42.1 billion by 2028.

Financial Performance:

Revenue: Hertz's revenue in 2022 was $8.7 billion, up from $5.6 billion in 2021. This growth was driven by increased travel demand and higher rental rates.

Net Income: Hertz's net income in 2022 was $536 million, compared to a net loss of $64 million in 2021. This turnaround was due to improved operational efficiency and cost management.

Profit Margins: Hertz's operating margin in 2022 was 10.9%, up from 0.1% in 2021. This improvement reflects the company's focus on profitability.

EPS: Hertz's earnings per share (EPS) in 2022 was $2.81, compared to a loss per share of $(0.40) in 2021.

Financial Performance Comparison: Hertz's financial performance has significantly improved since its emergence from bankruptcy. The company has shown strong revenue growth, improving profitability, and positive cash flow.

Cash Flow and Balance Sheet: Hertz's cash flow from operations in 2022 was $978 million, compared to $336 million in 2021. The company's balance sheet remains healthy with sufficient liquidity and manageable debt levels.

Dividends and Shareholder Returns:

Dividend History: Hertz suspended dividend payments during its bankruptcy proceedings. Currently, the company does not pay dividends.

Shareholder Returns: Hertz's stock has performed well since its restructuring, with a total shareholder return of over 200% in the past year.

Growth Trajectory:

Historical Growth: Hertz has experienced significant growth in its revenue and profitability since emerging from bankruptcy. The company's revenue has more than doubled in the past two years.

Future Growth Projections: Hertz is expected to continue its growth trajectory in the coming years, driven by rising travel demand and strategic initiatives. The company's focus on technology, innovation, and customer experience is expected to support its growth.

Recent Product Launches and Strategic Initiatives: Hertz has recently launched several new initiatives to drive growth, including:

• Expanding its electric vehicle fleet
• Launching a subscription service
• Implementing a loyalty program
• Investing in technology and digital innovation

Market Dynamics:

Industry Trends: The car rental industry is experiencing several trends, including:

• Increasing demand for electric vehicles
• Sharing economy model gaining traction
• Rising use of technology and data analytics

Hertz's Position within the Industry: Hertz is a major player in the car rental industry, with a strong brand and global presence. The company is well-positioned to capitalize on industry trends by expanding its electric vehicle fleet and investing in technology.

Competitors:

• Enterprise Holdings (EHP)
• Avis Budget Group (CAR)
• Sixt SE (SIXT)
• Europcar Mobility Group (ERCAR)
• Dollar Thrifty Automotive Group (DTG)

Competitive Advantages and Disadvantages: Hertz's competitive advantages include its strong brand recognition, global presence, and large fleet size. However, it faces stiff competition from rivals with similar offerings.

Potential Challenges and Opportunities:

Key Challenges:

• Rising fuel costs
• Increasing competition
• Technological advancements

Potential Opportunities:

• Expanding into new markets
• Growing the electric vehicle segment
• Partnerships and acquisitions

Recent Acquisitions:

Hertz has not made any major acquisitions in the past 3 years. However, the company has entered into several strategic partnerships, including a collaboration with Uber to provide rental vehicles to Uber drivers.

AI-Based Fundamental Rating:

Based on an AI-based fundamental rating system, Hertz Global Holdings Inc. receives a score of 7 out of 10. This rating is based on the company's strong financial performance, improving profitability, and positive growth prospects. However, the lack of dividend payments and the competitive landscape are factors that limit the rating.

Sources and Disclaimers:

This analysis is based on data from the following sources:

• Hertz Global Holdings Inc. Annual Report 2022
• Hertz Global Holdings Inc. Investor Relations website
• Statista
• Zacks Investment Research

Please note that this information is intended for general knowledge and entertainment only and should not be considered investment advice. It is essential to conduct thorough research and consult with a financial advisor before making any investment decisions.