One-glance verdict
Undervalued
$494.91 our estimate vs market $166.17
Wall Street consensus: $188.33 (-61.9% lower than our fair-value estimate)
66% below our estimate, below the bear case
Fundamentals snapshot
Herc Holdings Inc.
HRI · NYQ · Industrials · Rental & Leasing Services
Current price
$166.17
52-week range
$88.45 - $188.35
Market cap
$5.56B
Balance sheet
Distressed
1.50x Concerning
Net debt $9.56B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 12.3% last year.
- Reward Returns 6.3% on equity, ahead of 40% of its peers.
- Risk Net debt grew 170.4% over 3 years.
- Risk Operating margin compressed from 20.4% to 18.2% over 3 years.
What this company does
Herc Holdings Inc.
Herc Holdings rents out a wide variety of equipment, from lifts to generators, to businesses like construction companies and industrial manufacturers. Most of their money comes from these equipment rentals, which is important because it shows how much demand there is for their services in big industries.
How the company got here
Herc Holdings Inc. began its journey in 1965 as the equipment rental division of The Hertz Corporation. For decades, it operated as a subsidiary, growing its fleet and customer base. In July 2016, Herc Holdings was spun off from Hertz to become an independent, publicly traded company. This separation allowed Herc to focus exclusively on the equipment rental market, charting its own course for growth and strategy.
What it actually does
Herc Holdings, operating primarily under the Herc Rentals brand, is a leading provider of equipment rental and related services. Think of it as a giant toolbox for businesses that need specific tools or machinery for projects but don't want to buy and maintain them. Herc rents out a vast array of equipment, from heavy construction machinery to specialized tools, and also offers services like delivery, maintenance, and support to help customers complete their work efficiently and safely.
General Construction Equipment
This is the backbone of Herc's business, offering a wide variety of equipment essential for construction, infrastructure, and industrial projects. This includes aerial equipment (like lifts and booms), earthmoving machinery (such as excavators and bulldozers), material handling equipment (like forklifts), trucks, trailers, air compressors, compaction tools, and lighting equipment. Customers rent these items for specific project durations, avoiding the large upfront cost and ongoing upkeep of ownership.
Specialty Equipment and Solutions (ProSolutions)
Beyond general construction gear, Herc provides higher-value, specialized equipment and tailored solutions for specific industry needs. This category includes items like power generation equipment for temporary electricity, climate control systems for managing temperature on job sites, remediation and restoration equipment for cleanup projects, pumps for water management, and trench shoring equipment for safety in excavation. These specialized offerings cater to more complex or niche project requirements.
Professional Grade Tools (ProContractor)
Herc also supplies professional-grade tools designed for contractors and tradespeople. These are the high-quality, durable tools that professionals rely on for various tasks on a job site, from demolition to finishing work. By renting these tools, contractors can ensure they have the right equipment for the job without the investment of purchasing each item.
Ancillary Services
To support its rental operations, Herc offers a comprehensive suite of services. This includes essential maintenance and repair to keep equipment in top condition, equipment management to help customers track their rentals, and safety training to ensure proper and secure operation. They also provide logistical support like equipment transport, rental protection plans, cleaning, refueling, and on-site assistance, making the rental process smoother for customers.
Sales of Used Equipment and Supplies
Herc generates additional revenue by selling used equipment that has been retired from its rental fleet. This allows customers to purchase well-maintained, pre-owned machinery at a lower cost. The company also sells contractor supplies, such as construction consumables, tools, and safety gear, offering a convenient one-stop shop for many project needs.
What management is betting on now
Herc's leadership is focused on growing the company by expanding its core rental business, especially in urban areas where it can achieve greater scale and efficiency. A key strategy is to increase the proportion of specialty equipment rentals, as more businesses opt to rent complex machinery rather than buy it. They are also investing in technology, such as their ProControl digital platform, to improve customer experience and operational efficiency. Furthermore, Herc is actively acquiring smaller rental companies to expand its geographic reach and service capabilities, aiming to become a more dominant player in the industry.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$297.00M
FY2025 Q1
$138.00M
FY2025 Q2
$194.00M
FY2025 Q3
$315.00M
FY2025 Q4
$281.00M
FY2026 Q1
$236.00M
FY2026 Q2
$273.00M
FY2026 Q3
$335.00M
Revenue
$1.36B
Net income
$104.00M
Diluted EPS
3.10
Operating cash flow
$360.00M
Free cash flow
$335.00M
Fetching…
Sources
Revenue
$1.20B
Net income
$19.00M
Diluted EPS
0.57
Operating cash flow
$314.00M
Free cash flow
$273.00M
Fetching…
Sources
Revenue
$1.14B
Net income
$-24.00M
Diluted EPS
-0.72
Operating cash flow
$277.00M
Free cash flow
$236.00M
Fetching…
Sources
Revenue
$1.21B
Net income
$24.00M
Diluted EPS
0.93
Operating cash flow
$315.00M
Free cash flow
$281.00M
Fetching…
Sources
Revenue
$1.30B
Net income
$30.00M
Diluted EPS
0.90
Operating cash flow
$358.00M
Free cash flow
$315.00M
Fetching…
Sources
Revenue
$1.00B
Net income
$-35.00M
Diluted EPS
-1.17
Operating cash flow
$241.00M
Free cash flow
$194.00M
Fetching…
Sources
Revenue
$861.00M
Net income
$-18.00M
Diluted EPS
-0.63
Operating cash flow
$171.00M
Free cash flow
$138.00M
Fetching…
Sources
Revenue
$951.00M
Net income
$-46.00M
Diluted EPS
-1.63
Operating cash flow
$331.00M
Free cash flow
$297.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $494.91 vs current price $166.17
Wall Street consensus is the average analyst price target: $188.33 (-61.9% lower than our fair-value estimate).
Our most-likely fair value is $494.91 a share — about 197.8% above today's price of $166.17, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $9.6B. Interest coverage 1.5x.
Net debt
$9.56B
Interest coverage
1.50x
Herc Holdings Inc.'s profit covers its interest bill about 1.5 times over. and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
HRI
BASELINE
Herc Holdings Inc.
Total debt $9.63B Interest coverage 1.50x This is the baseline the peer rows are being compared against.
Total debt $15.87B Interest coverage 5.55x +271% vs HRI Carries about 3.7x more debt cushion than HRI.
Total debt $3.79B Interest coverage 2.09x +40% vs HRI Carries about 1.4x more debt cushion than HRI.
Total debt $589.89M Interest coverage 7.96x +432% vs HRI Carries about 5.3x more debt cushion than HRI.
Total debt $2.50B Interest coverage 0.90x -40% vs HRI Carries about 1.7x less debt cushion than HRI.
What you should know
The case for and against HRI
3 Rewards
2 Risks
Rewards
-
Revenue grew 12.3% last year.
-
Returns 6.3% on equity, ahead of 40% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Net debt grew 170.4% over 3 years.
-
Operating margin compressed from 20.4% to 18.2% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
44.43x
Forward P/E
14.43x
P/B
2.84x
P/S
1.13x
EV/EBITDA
15.18x
PEG ratio
0.04x
Profitability
How much profit each dollar creates
Gross margin
32.7%
Operating margin
18.2%
Net margin
2.5%
ROE
6.3%
ROA
3.0%
Health
Liquidity and balance-sheet strength
Debt / equity
4.85x
Current ratio
1.08x
Quick ratio
0.96x
Total debt
$9.63B
Total cash
$66.00M
Growth
How the business has been compounding
Revenue TTM
$4.92B
Revenue 5Y CAGR
20.5%
EPS TTM
3.74
EPS 5Y CAGR
-86.0%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.27B
Free CF TTM
$928.00M
FCF margin
18.9%
Dividend
Shareholder payout
Yield
2.2%
Payout ratio
74.9%
Last ex-div date
2026-09-02