Hertz Global Holdings Inc. shares surged Thursday after the company reported a smaller-than-expected loss for the second quarter, signaling early progress in its efforts to revive the business.
The company posted an adjusted loss of 34 cents per share, beating Wall Street’s consensus estimate of a 42-cent loss.
Though modest, Hertz also returned to profitability on an adjusted Ebitda basis — earning approximately $1 million for the quarter — marking its first positive Ebitda result in nearly two years.
The results were well received by investors, with the stock rising as much as 13% at the opening bell in New York.
The stock shedded some gains and was trading 10% up at the time of writing.
Through Wednesday’s close, Hertz stock had already climbed 52% year-to-date, fueled in part by optimism around management’s turnaround plan and interest from prominent investors such as Bill Ackman’s Pershing Square Capital Management, which has built a significant stake in the company.
That stake is seen by analysts as both a strategic and confidence-boosting move during Hertz’s recovery efforts.
Fleet adjustments and tariff strategy
In a bid to strengthen financials and avoid cost pressures, Hertz has been overhauling its vehicle fleet.
The company focused on retiring older models and acquiring new vehicles during the first half of the year.
This strategy is partly aimed at mitigating potential cost increases stemming from the Trump administration’s proposed tariffs on imported cars.
Additionally, Hertz has reduced the overall size of its fleet to better align with current travel demand.
This resizing helps avoid excess capacity and supports operational efficiency.
One of the most notable improvements came in vehicle depreciation costs, which dropped 58% year-over-year to $251 per vehicle per month.
That’s a significant improvement compared to the prior year when Hertz was grappling with losses tied to a poorly timed bet on Tesla Inc.’s electric vehicles.
Revenue, pricing and debt remain headwinds
Despite progress in fleet management and cost control, Hertz continues to face challenges on the revenue front.
The company saw a decline in both rental pricing and transaction volume in the second quarter.
Revenue per day dropped by over $3 to $55.65, while the number of transaction days declined by 3%.
These metrics suggest persistent pricing pressure and softer demand, which could weigh on future earnings performance.
Moreover, Hertz continues to carry a heavier debt burden compared to competitors like Avis Budget Group Inc., which may limit financial flexibility as the company navigates a changing macroeconomic landscape.
While the second-quarter results mark a step in the right direction for Hertz, sustained recovery will likely require further improvements in rental demand and pricing power.
The support from strategic investors such as Pershing Square may provide a cushion for continued restructuring, but market conditions and tariff policy will remain key variables in the months ahead.
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