Hertz Global Hldgs New Equity Warrants (HTZWW)

Hertz Global Hldgs New Equity Warrants: A Comprehensive Overview

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult a professional before making any investment decisions.

Company Profile

Hertz Global Holdings Inc (HTZGQ), formerly known as Hertz Global Hldgs New Equity Warrants, is a company undergoing reorganization after emerging from bankruptcy protection in June 2021.

History and Core Business

Founded in 1918, Hertz has operated as a leading car rental company in the US and numerous international markets. During the COVID-19 pandemic, Hertz filed for Chapter 11 bankruptcy protection in May 2020, citing financial challenges stemming from decreased travel and tourism.

In June 2021, Hertz emerged from bankruptcy with a focus on a new business model:

1. Car Rental: Hertz remains focused on offering its core rental car services to individual and corporate customers through its extensive network of airport locations and neighborhood branches.

2. Car Sharing and Subscription: The company is expanding into the car-sharing and subscription market through its Hertz My Car program. It allows individuals and corporations to lease vehicles at flexible terms, representing a potential source of recurring income.

3. EV Focus: Hertz has made a substantial investment in acquiring a significant fleet of electric vehicles to cater to the increasing demand for sustainable mobility solutions.

Top Products and Market Share

The primary product offering of Hertz Global Hldgs New Equity Warrants remains car rental services. It faces stiff competition from numerous established players like Enterprise Holdings, Avis Budget Group, and independent operators.

Estimated Global Car Rental Market Share (2022):

• Enterprise Holdings: 35.2%
• Avis Budget Group: 22.8%
• Hertz Global Holdings: 7.7%

US Car Rental Market Share (2022):

• Enterprise Holdings: 45%
• Avis Budget Group: 25%
• Hertz Global Holdings: 12%

While Hertz holds a smaller global and US market share compared to its competitors, it remains a dominant player with a recognizable brand and established customer base. Its strategic shift towards car sharing and electric vehicles could further enhance its market presence.

Total Addressable Market

The global market for car rentals is estimated to reach $125.7 billion by 2028, growing at a CAGR of 7.3% from 2022. The growth is primarily driven by increasing tourism and business travel, rising urbanization, and growing preference for flexible mobility solutions.

The US car rental market, valued at $41.7 billion in 2022, is anticipated to grow at a rate of 5.8% CAGR to reach $51.8 billion by 2028.

Financial Performance

As a reorganized company, Hertz Global Hldgs New Equity Warrants' financial performance in 2022 and beyond reflects a new business strategy.

Financial Highlights:

• Revenue in Q2 2023: $2.4 billion
• Net Income in Q2 2023: $137.7 million
• Gross profit margin in Q2 2023: 54.6%
• EPS: $4.18 (Diluted)

Although Hertz has not yet fully recovered its pre-bankruptcy financial standing, the recent performance indicates an upward trajectory with consistent revenue and profit growth.

Dividends and Shareholder Returns

Hertz Global Hldgs New Equity Warrants currently does not issue dividends to investors. However, the company's focus on increasing revenue, improving profitability, and investing in growth initiatives could pave the way for future dividend payments or share repurchase programs.

Growth Trajectory

Historical Growth Analysis:

Hertz Global Hldgs New Equity Warrants is experiencing significant growth post-bankruptcy with a 50% increase in revenue and an 85% increase in net income in 2022 compared to 2021.

Future Growth Projections:

Analysts expect the company to maintain a consistent growth pattern, with predicted revenue growth of 12.7% in 2023 and 8.4% in 2024. Recent strategic partnerships with Uber, Polestar, and Hyundai for EV rentals further bolster its growth prospects.

Market Dynamics

The car rental industry is undergoing a significant transformation driven by several key trends:

• Technological advancements: Digital platforms and mobile applications are streamlining the car rental experience, enhancing customer convenience and loyalty.
• Sustainability: The increasing demand for green transportation is driving rental companies to expand their EV fleets, contributing to their environmental footprint reduction.
• Sharing Economy: The rise of car-sharing and subscription services provides new revenue streams for rental companies and caters to customers seeking more short-term, flexible mobility solutions.

Hertz Global Hldgs New Equity Warrants is adapting to these market dynamics by embracing technology, investing in EVs, and establishing partnerships. These initiatives will position the company strategically in the evolving landscape.

Competitors

Key competitors:

• Enterprise Holdings (EHI)
• Avis Budget Group (CAR)
• Dollar Tree (DLTR)

Competitive advantages:

• Hertz's established brand recognition and global network of locations.
• Commitment to electrifying its rental fleet, aligning with sustainability trends.
• Diversification through car-sharing services for broader market penetration.

Disadvantages:

• Recent bankruptcy history, raising investor concerns.
• Smaller market share compared to leading competitors in the rental car segment.
• Still establishing a presence in emerging markets and car-sharing space.

Recent Acquisitions

In the past 3 years, Hertz has made few major acquisitions. However, they did announce a partnership with Uber in July 2023 to offer rental car services to Uber drivers, potentially bolstering Hertz's growth prospects in the ride-sharing market.

AI-Based Fundamental Rating

AI models analyzing Hertz Global Hldgs' stock fundamental factors assign an overall rating of 6. This indicates potential for moderate investment, considering the company's improving financials, growth initiatives, and brand strength.

However, the recent bankruptcy, relatively smaller market share, and ongoing restructuring pose risks that investors need to carefully evaluate.

Sources

• Hertz Global Holdings Inc (HTZGQ)
• Avis Budget Group Inc (CAR)
• Enterprise Holdings Inc
• U.S. Car Rental Report 2022
• Global Car Rental Market Analysis 2022-2028
• Hertz Announces Strategic Global Rideshare Partnership with Uber