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Investing.com - BofA Securities has reiterated its Underperform rating and $3.10 price target on Hertz Global (NASDAQ:HTZ) following the company’s third-quarter earnings report. This target represents significant downside from the current price of $6.58, despite Hertz’s 70% gain over the past year. According to InvestingPro data, analysts remain cautious with a consensus recommendation of 3.5 and price targets ranging from $3 to $6.
Hertz reported adjusted EBITDA of $190 million for the third quarter of 2025, exceeding both BofA’s estimate of $126 million and consensus expectations of $176 million. The company posted revenue of $2.48 billion, 5.4% above BofA’s estimate, though this represented a 3.8% year-over-year decline. This continues a challenging trend, as InvestingPro data shows Hertz’s revenue has declined 7.6% over the last twelve months, with a weak gross profit margin of just 6.5%.
The earnings beat was attributed to better revenue per unit (0.8% above BofA’s estimate), higher-than-expected utilization at 84%, and a larger fleet (1% above BofA’s estimate). Fleet size decreased 4% year-over-year, while pricing declined 5.4% compared to the same period last year. Investors should note that Hertz stock movements remain highly volatile, with a beta of 2.14, contributing to its substantial 26% decline over the past six months despite the recent positive results.
Depreciation per unit came in at $273, slightly below BofA’s estimate by 0.8%, and showed a significant 49.1% year-over-year decrease. Hertz expects to maintain depreciation per unit below $300 throughout 2026.
The company reported liquidity of $2.2 billion, including $1.1 billion in cash (up from $0.5 billion in Q2 2025) and $1.1 billion available under its First Lien RCF (up from $0.9 billion in Q2 2025). During the quarter, Hertz issued $425 million in exchangeable notes maturing in 2030, with its first non-vehicle debt maturity of $553 million coming due in 2026. This liquidity improvement is crucial as InvestingPro analysis shows Hertz’s short-term obligations exceed liquid assets with a current ratio of 0.85, while carrying a substantial total debt of nearly $20 billion. Get the full financial picture with InvestingPro’s comprehensive Research Report on Hertz, one of 1,400+ US equities covered in depth.
In other recent news, Hertz Global Holdings, Inc. has announced the completion of a $425 million offering of 5.500% exchangeable senior notes due in 2030. This offering, which included the full exercise of an option to purchase an additional $50 million, was oversubscribed and included investment from Pershing Square Capital Management L.P. The funds are expected to bolster Hertz’s financial resources as it continues its corporate transformation. Additionally, Hertz has appointed Michael Moore as Executive Vice President and Chief Operating Officer, effective September 30. Moore, who joined Hertz in July 2024, previously held leadership roles at Delta Air Lines and Virgin Galactic. His new role will give him direct responsibility for all fleet operations at Hertz. These developments reflect the company’s ongoing efforts to strengthen its leadership team and financial standing.
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