Hertz Stock Skyrockets on First Profit in 2 Years

Surprise Q3 Profit: Hertz Global Holdings (NASDAQ: HTZ) swung to its first quarterly profit in nearly two years, reporting Q3 2025 net income of $184 million (diluted EPS $0.42) versus a $1.3 billion loss in the same quarter last year ^[1] ^[2]. Adjusted earnings of $0.12 per share crushed analyst expectations of only ~$0.02 ^[3]. Revenue came in at $2.5 billion (a 4% YoY decline) but slightly beat forecasts of ~$2.4B ^[4].
Shares Soar on Earnings: Hertz stock surged as much as 20–27% in pre-market and early trading on Nov 4, 2025 after the earnings beat ^[5] ^[6]. The stock jumped to around $5.90 intraday ^[7], its highest in weeks, before settling near the mid-$5 range. Year-to-date, HTZ has more than doubled – buoyed in part by billionaire Bill Ackman’s Pershing Square taking a ~20% stake earlier in 2025 ^[8] ^[9] – though it remains far below post-bankruptcy highs.
Turnaround via Fleet Overhaul: Hertz’s “Back-to-Basics” transformation plan is yielding results. The company refreshed its fleet with newer, more cost-efficient vehicles and expanded used car sales via its online Hertz Car Sales platform ^[10] ^[11]. This drove a record 84% fleet utilization (highest since 2018) in Q3 ^[12] and dramatically lowered depreciation expense per vehicle to $273 per month – roughly half of last year’s level ^[13] ^[14]. Operating costs were tightly controlled (direct operating expense down 1% YoY) ^[15], helping swing the operating margin to +19.4% from -2.1% a year ago ^[16] ^[17].
Competitive Landscape: Rival Avis Budget Group (CAR) also beat Q3 estimates, posting $3.5 billion revenue (+1% YoY) and $360 million net income ^[18]. Avis’s adjusted EBITDA jumped 11%, aided by lower fleet costs and a slight uptick in rental volume ^[19] ^[20]. Both Hertz and Avis are benefiting from sustained travel demand – rental days are up ~1% – but face normalization in pricing (Americas revenue per day ticked down ~1% for Avis) ^[21]. Market share: Avis’s revenues remain larger, and its stock ( ~$145) is valued ~3x higher by market cap, yet Hertz’s growth potential is drawing increased investor attention.
Industry Trends – EVs and Mobility: Hertz’s aggressive foray into electric vehicles has been tempered. After bold plans to electrify 25% of its fleet by 2025, Hertz reversed course in 2024 by selling off about 20,000 EVs (a third of its EV fleet) due to weaker-than-expected rental demand and higher maintenance costs ^[22] ^[23]. The company found many renters weren’t as interested in EVs beyond existing EV owners ^[24]. Major automakers are also scaling back EV output as EV sales growth slows and consumers remain wary of charging and range issues ^[25]. Nonetheless, Hertz says it remains committed to EVs long-term (investing in charging infrastructure and partnerships) ^[26]. Meanwhile, rental firms are positioning as broader “mobility” providers – for example, Avis partnered with Waymo to manage a robotaxi fleet in Dallas starting 2026 ^[27] ^[28], and Hertz rents Teslas to Uber drivers by the week, underscoring the blurred lines between car rental, ride-hailing, and autonomous vehicle services.
Analyst and Expert Outlook: Despite the upbeat results, Wall Street is cautious on HTZ. The stock has a “Hold/Reduce” consensus with 0 Buy ratings (2 Holds, 2 Sells) and an average 12-month price target of about $4.50, implying downside from current levels ^[29] ^[30]. Some analysts remain unconvinced of sustained revenue growth (consensus expects flat sales over the next year) ^[31]. However, notable investors are bullish on Hertz’s trajectory. Bill Ackman praised CEO Gil West’s focus on boosting unit revenues and cutting costs, predicting it will “significantly improve profit margins over the next several years” and allow shareholders to earn “highly attractive returns” given Hertz’s leaner cost structure ^[32]. He cautioned that near-term travel demand could be clouded by macro factors (e.g. tariffs), but voiced confidence that Hertz can achieve “sustainably higher profitability” in the intermediate term ^[33].

Hertz’s Q3 2025 Comeback: First Profit in Years Fuels Rally

Cars parked near a Hertz rental location at New York’s JFK Airport (symbolizing recovering demand). Hertz stunned investors with a return to profitability in Q3 2025, marking a pivotal milestone in its post-bankruptcy turnaround.

Hertz Global Holdings’ latest earnings report proved to be a game-changer for the stock. On November 4, 2025, the company announced that it had swung to a net profit for the first time in roughly two years – a stark turnaround from the steep losses logged throughout 2024 ^[34]. The third-quarter 2025 net income of $184 million (or $0.42 per share) stands in dramatic contrast to the $1.33 billion loss (–$4.34 per share) Hertz suffered in Q3 2024 ^[35] ^[36]. Even on an adjusted basis (stripping out one-time items), Hertz earned $0.12 per share, demolishing analysts’ meager 2-cent EPS estimate ^[37].

This earnings surprise immediately ignited euphoric trading in HTZ stock. In pre-market hours, Hertz shares rocketed roughly 27% higher as the news spread ^[38]. Once the market opened, the stock remained one of the top gainers on Nasdaq – up about 17% by mid-morning, trading in the mid-$5s ^[39]. At one point shares hit $5.90 (up ~19% intraday), before tempering some gains ^[40]. The one-day jump on earnings reflects renewed investor confidence that Hertz’s turnaround strategy is bearing fruit. It’s a remarkable reversal of market sentiment from a year ago, when continuous losses and operational missteps weighed heavily on the stock.

Notably, Hertz’s revenues of $2.48 billion, while down ~4% from the $2.58 billion a year ago, actually came in ahead of consensus expectations (~$2.39–2.40B) ^[41] ^[42]. This indicates the company outperformed the market’s admittedly low bar for the quarter. The revenue dip was partly due to strategic fleet reductions and softer pricing, but Hertz offset that with new income streams – including higher vehicle resale revenues. In fact, management highlighted that used car sales (through its direct-to-consumer platform) have expanded by 570 basis points as a share of fleet disposals in 2025 ^[43], helping to monetize the fleet at favorable prices despite a cooling used-car market.

Equally important, expenses have been reined in dramatically. Vehicle depreciation costs – historically a huge expense for rental companies – have plummeted for Hertz. In Q3, depreciation per vehicle averaged just $273 per month, roughly half of what it was a year ago when used car values were falling fast ^[44]. This achievement hit the company’s “North Star” goal of keeping depreciation under $300, and Hertz has locked in its 2026 vehicle purchases at prices that should maintain these low depreciation rates next year ^[45]. Lower fleet costs, combined with a 1% reduction in direct operating expenses year-on-year ^[46], boosted Hertz’s adjusted corporate EBITDA by an astounding $350 million versus last year’s levels ^[47] ^[48]. The result: a swing to a 7% net profit margin this quarter from a deeply negative margin a year prior ^[49].

All these improvements underscore that Hertz’s turnaround plan is finally hitting its stride. New CEO Gil West – who took the helm in mid-2023 – summed it up, saying “this quarter proves that we’re delivering on our commitments through focused execution and operational discipline” ^[50]. Investors who had been waiting to see evidence of a sustainable turnaround now have tangible proof in the form of positive earnings and cash flow. Hertz generated roughly $250 million in free cash flow in Q3 and ended the quarter with over $2.2 billion of liquidity ^[51] ^[52], giving it a solid cushion to weather any bumps ahead. This financial momentum – a profitable quarter and strengthened balance sheet – is a key reason the stock skyrocketed on the news.

Stock Performance and Technical Analysis

Hertz’s stock performance in 2025 has been nothing short of a rollercoaster. The year began with HTZ languishing in the low single digits, as the company was still posting losses in late 2024 and investor sentiment was weak. However, a series of catalytic events dramatically altered the stock’s trajectory. The most prominent was in April 2025, when famed activist investor Bill Ackman revealed that his fund, Pershing Square, had accumulated a 19.8% stake in Hertz ^[53]. This endorsement of Hertz’s potential sent the stock skyrocketing – shares soared 44% in a single day on Ackman’s announcement ^[54], and by mid-April the stock had more than doubled (up 125% year-to-date) ^[55]. Most of that rise occurred as investors piled in alongside Ackman, betting on a successful turnaround and perhaps a squeeze on the heavy short interest that had built up.

After peaking around summer 2025 (trading briefly in the $7–7.5 range during late September ^[56] ^[57]), HTZ shares pulled back amid broader market volatility and some profit-taking. By late October, the stock had drifted down to the high-$4s, reflecting cautious sentiment ahead of earnings. Technically, this meant Hertz entered its Q3 report in a short-term downtrend, with price below its early-October highs and testing support around the mid-$4 level (near its 200-day moving average around ~$5). The massive earnings-fueled rally, however, saw HTZ break above its 50-day trendline decisively on heavy volume, which is typically a bullish signal. Chart-wise, the next key resistance level for the stock may be around the $6.50–$7 zone, which capped rallies in August and September. If momentum carries the stock past that zone, it could signal a more prolonged uptrend. On the downside, the $5 level (which was a resistance-turned-support and roughly the pre-earnings closing price ^[58]) now becomes an important support – a floor that bullish investors will want to see hold in the coming weeks.

From a technical analysis perspective, indicators are improving. The Relative Strength Index (RSI) likely swung from oversold in late October to an upbeat reading after the post-earnings jump, reflecting renewed positive momentum. The surge also closed a price gap from early October when shares sold off. In short, Hertz’s chart has turned constructive: higher lows are in place since the Ackman stake news, and the recent high-volume breakout could presage further gains if the company continues to deliver on results. Still, volatility remains a hallmark of HTZ – sharp swings have occurred with each news cycle – so traders should be prepared for the stock to consolidate after its big move. The broad market environment (interest rates, recession fears, etc.) will also influence whether Hertz can build on its uptrend or if it retests lower technical support in the near term. Overall, the technical outlook has improved markedly alongside Hertz’s fundamentals, giving bulls some confidence that the worst may be behind the stock.

Fundamental Analysis: Hertz’s Turnaround Strategy in Focus

Hertz’s quarterly revenues over the past five years. The company’s sales spiked coming out of the pandemic (2021–22) but then cooled amid fleet downsizing and pricing normalization, before stabilizing around the $2.5 billion/quarter level in 2023–2025. The Q3 2025 revenue beat suggests Hertz may be finding a new growth footing even as industry demand normalizes.

The foundations of Hertz’s turnaround are rooted in a “Back-to-Basics” strategy that management initiated after the company emerged from bankruptcy in mid-2021. In recent quarters, that strategy has zeroed in on three main pillars: fleet optimization, cost discipline, and customer experience. Q3 2025 provides clear evidence that these efforts are paying off.

First, on fleet optimization: Hertz undertook a transformative fleet refresh in 2023–2024, retiring older cars and investing in newer models that are not only more appealing to customers but also cheaper to maintain. By Q3 2025, Hertz declared this fleet refresh complete, noting it has “set a new standard for the lifecycle of its vehicles” ^[59] ^[60]. The immediate benefit is seen in vehicle economics – the depreciation per unit has fallen to historically low levels (as mentioned, $273 per month ^[61]). This was achieved by Hertz buying vehicles “right” (at favorable prices during fleet acquisition) and selling them “right” (maximizing proceeds by channeling more de-fleeted cars through retail sales rather than auctions) ^[62]. In fact, retail sales now account for a significantly higher portion of Hertz’s fleet disposals (up 5.7 percentage points vs 2024) ^[63], allowing the company to capture higher margins on used car sales. Additionally, Hertz has secured its vehicle procurement for model year 2026 already, locking in costs and ensuring supply – a prudent move given potential auto production volatility ^[64].

Second, cost discipline: Alongside lower depreciation, Hertz slashed other operating costs via what CEO Gil West calls “rigorous cost control and operational discipline” ^[65]. Direct operating expense (DOE) in Q3 was 1% lower than last year ^[66], even though the company rented out a similar volume of cars. Moreover, DOE per transaction day – a key efficiency metric – improved both sequentially and year-on-year ^[67]. This suggests Hertz is managing each rental more efficiently (e.g. quicker turnarounds of vehicles, better labor optimization at rental locations, etc.). The company’s network rationalizations, such as closing underperforming locations and investing in digital self-service, have likely contributed to leaner operations. Utilization rate – essentially the percentage of the fleet actively on rent generating revenue – hit 84% in Q3, a level not seen since 2018 ^[68]. Higher utilization is crucial, as it means more of Hertz’s assets are sweating and earning money at any given time, spreading fixed costs over more revenue-generating days.

Third, customer experience and demand generation: Hertz reports that its North America Net Promoter Score (NPS) – a measure of customer satisfaction – jumped nearly 50% year-over-year ^[69]. Happier customers often translate to repeat business and market share gains. The company attributes this to improved vehicle quality (thanks to the newer fleet) and easier rental processes (investments in technology like digital check-in, etc.). These efforts help drive demand even in a somewhat “slowdown” environment for car rental. It’s noteworthy that industry-wide, the travel rebound of 2021–2022 (when car rental rates hit astronomical levels amid vehicle shortages) has cooled off. But Hertz has managed to offset softer pricing by increasing volume and loyalty. In the U.S., airport travel has been steady, and off-airport rentals (e.g. neighborhood locations, replacement rentals) have provided additional demand. Hertz’s diversification into new revenue streams – such as renting cars to Uber and Lyft drivers (including Tesla rentals for rideshare), and offering monthly subscriptions for rentals – also expands its addressable market. These initiatives align with Hertz’s goal to “thrive across the full spectrum of mobility,” as West put it ^[70].

Crucially, Hertz’s financial health is improving in tandem with operations. The company’s adjusted corporate EBITDA was $190 million in Q3, versus a negative $157 million a year ago ^[71] ^[72]. Free cash flow for the quarter turned positive (~$250M), and liquidity of $2.2 billion includes ample cash and access to funding via its asset-backed securities (ABS) programs ^[73] ^[74]. Hertz did add some debt earlier in 2025 (it raised $685 million via notes in July ^[75]), but also refinanced certain obligations at lower rates and extended maturities (e.g. Avis notably extended a $1.1B term loan to 2032 ^[76]; Hertz has been doing similar liability management). With a healthier balance sheet post-bankruptcy (Hertz eliminated over $5 billion of debt in the Chapter 11 process), the company is now in a position where it can fund fleet growth and tech investments without over-leveraging.

In summary, the fundamental outlook for Hertz has markedly brightened. The company is demonstrating that it can be profitable even on a slightly smaller revenue base than pre-pandemic, thanks to a leaner cost structure. The fleet is younger (which means fewer breakdowns and happier customers), costs are under control, and new initiatives are contributing to both top and bottom lines. Of course, challenges remain – the car rental business can be cyclical and is vulnerable to external shocks (from recessions to oil prices or travel bans). But Hertz 2025 is far more resilient than Hertz 2020 was. The Q3 results validate management’s strategy and give confidence that the iconic rental car firm can indeed complete its comeback story.

Competitors & Industry Trends: Car Rentals in a Changing Mobility Landscape

Hertz doesn’t operate in a vacuum – its fortunes are intertwined with trends affecting the global car rental and mobility industry. A look at its chief publicly traded competitor, Avis Budget Group, and broader sector dynamics provides context for HTZ’s prospects.

Avis (CAR): In late October 2025, Avis Budget Group reported its own strong Q3 results, which in many ways mirror Hertz’s improvements – albeit from a position of already sustained profitability. Avis generated $3.5 billion in revenue for Q3, marking a return to year-over-year growth (+1%) after a slight dip in prior quarters ^[77]. Net income was $360 million, with a hefty adjusted EPS of $10.11 that trounced analyst expectations (forecast was ~$8.24) ^[78]. Avis’s performance underscores that demand for rentals remains robust, but also that the industry’s explosive post-pandemic boom has normalized. For instance, Avis saw rental days increase 1% YoY – indicating slightly higher volume – but revenue per day slipped ~1% (excluding currency effects) ^[79]. This is a classic sign of the market normalizing: fleets have been rebuilt (easing the car shortage, which had let rental companies charge sky-high rates in 2021–22) and competition on pricing has resumed.

Both Avis and Hertz benefited from lower fleet holding costs this quarter. Avis noted that its fleet costs per vehicle fell significantly, helping drive a 37% surge in international segment EBITDA and an 11% overall EBITDA gain ^[80]. This aligns with the trend Hertz experienced – used car values have stabilized, so depreciation expenses are far lower than when values were plummeting in 2023. Additionally, both companies are managing fleet size carefully to avoid an oversupply in a softening economy. Avis’s Americas fleet saw rental volume up slightly, but they matched it with utilization improvements and cost cuts (much like Hertz).

In terms of market positioning, Avis and Hertz are in a duopoly (along with privately-held Enterprise) in many markets. Avis has strengths in Europe and via its Zipcar car-sharing brand, while Hertz has a strong U.S. airport presence and partnerships (like its Hertz 24/7 car share in Europe). So far in 2025, Avis’s stock had underperformed Hertz’s – CAR stock traded around $140–150 in late 2025, down from peaks, partly because its valuation was already rich after record 2021 earnings. On the other hand, Hertz’s stock, at ~$5–6, is seen as a turnaround play with potentially more upside if it closes the gap with Avis’s profitability metrics.

Mobility Industry Shifts: A major trend impacting car rentals is the rise of new mobility services – from ride-hailing (Uber, Lyft) to car-sharing and now autonomous vehicles. Rental companies are adapting rather than standing still. For example, Avis’s partnership with Alphabet’s Waymo is a headline-grabbing move: Avis will manage Waymo’s robotaxi fleet operations (maintenance, charging, cleaning, etc.) in Dallas as Waymo expands driverless ride-hailing there in 2026 ^[81] ^[82]. This leverages Avis’s core competency (fleet management) in the emerging autonomous taxi space. It’s a win-win: Waymo gets a scalable operations partner, and Avis gets a foothold in the AV revolution (and associated revenue).

Hertz, too, has been aligning with mobility trends. It struck deals to provide rental Teslas to Uber drivers, effectively acting as a fleet provider for ride-hailing contractors ^[83]. Hertz offers weekly rentals to Uber drivers in multiple cities, which has been a successful program (at one point in 2022, Uber cited that 50,000 drivers had rented Teslas through Hertz). This not only generates steady utilization for Hertz’s EV fleet, but also exposes more consumers to its rental services in a non-traditional way. It’s part of Hertz’s strategy to be present “wherever mobility demand is” – whether that’s a family vacation or a gig-economy driver needing a car.

Electric Vehicles: Perhaps the most striking industry shift has been the push toward electrification – and Hertz was initially all-in. In 2021, Hertz famously announced it would buy 100,000 Teslas, signaling that EVs were the future for rental fleets ^[84]. It later inked deals with GM (up to 175,000 EVs over five years) and Polestar (65,000 EVs) ^[85]. However, reality set in by 2023–2024: renters’ uptake of EVs was slower than expected, and operational challenges emerged. According to filings, Hertz found repair costs for EVs were higher, and resale values for some models (especially as new EV supply increased) fell more than anticipated ^[86]. The result was a strategic pullback – Hertz sold off 20,000 EVs (mostly Teslas) from its U.S. fleet in early 2024 ^[87], opting to replace them with fuel-efficient gas cars “to meet customer demand” ^[88]. Essentially, many Hertz customers weren’t asking for EVs, and some who tried them encountered charging or familiarity issues, leading to lower satisfaction. As reported, the EV rental demand that did materialize came largely from customers who were already EV owners and comfortable with the technology ^[89].

This doesn’t mean EVs have no future in rentals – in fact, Hertz still holds a significant EV fleet and has invested in charging networks (e.g. partnering with BP Pulse to install chargers ^[90]). But it does indicate a more realistic adoption curve. In the near term, internal combustion and hybrid vehicles remain the backbone of rental fleets. Hertz and Avis will likely time their next big EV fleet expansions to consumer readiness (perhaps when EVs are more mainstream and charging infrastructure is ubiquitous).

Autonomy and the Future: Looking further out, rental companies could play a major role in autonomous mobility. As mentioned, Avis is already partnering with Waymo. Bill Ackman, in fact, mused that “Uber and Hertz would be ideal partners to roll out a fleet of autonomous vehicles over time”, suggesting that Hertz’s network of locations and vehicle care depots could support self-driving cars for ride-hail or rental use ^[91]. While autonomous robotaxis are still in pilot phases (and some setbacks like GM’s Cruise pause have occurred), if and when they scale, companies like Hertz can either be disrupted or be enablers of the technology. Hertz’s advantage is fleet management expertise and a nationwide presence of lots where cars can be serviced and recharged. Indeed, Avis’s CEO has explicitly framed their vision as evolving into a broader “mobility services provider,” not just a rental car firm ^[92]. Hertz shares that vision – evidenced by its branding of itself as a “global mobility solutions provider” and ventures like car sharing (Hertz 24/7) and subscription rentals.

Peer-to-Peer Competition: Another trend is the rise of peer-to-peer car rental platforms like Turo, where individuals rent out their personal vehicles. While Turo and similar services have grown, Hertz and Avis still command a huge advantage in fleet size, airport access, and trust (many travelers feel more secure renting from a known company with roadside assistance, etc.). However, the traditional firms have had to keep pricing competitive in leisure destinations where P2P options exist. So far, the impact on the giants’ revenues seems limited, but it’s a space they are monitoring. Interestingly, some rental companies have lobbied for regulations on peer rentals (insurance requirements, etc.), which could level the playing field.

In summary, the car rental industry in 2025 is at an intersection of steady post-pandemic demand and transformative change on the horizon. Hertz’s recent pain and resurgence must be viewed in light of this context: the company navigated COVID and bankruptcy, rode the travel boom, and is now calibrating its fleet for a future of EVs and AVs while fending off new forms of competition. The trends of electrification, autonomous tech, and shifting consumer preferences (ride-share, etc.) present both challenges and opportunities. Hertz’s strategy of partnering where it makes sense (Uber, BP, etc.), and focusing on operational excellence in its core business, will determine if it can maintain an edge over competitors old and new. So far, 2025’s developments show the incumbents are not sitting idle – they’re evolving quickly, and Hertz’s ability to adapt will remain key to its long-term success.

Expert Opinions and Analyst Views

The dramatic developments at Hertz have naturally drawn commentary from industry experts, analysts, and high-profile investors. Views are somewhat mixed – praise for the turnaround progress, tempered by caution over remaining risks.

On the bullish side, Bill Ackman’s endorsement of Hertz has been a major confidence booster. Ackman, known for successful investments in companies undergoing transformations, articulated a strong long-term case for Hertz. He believes CEO Gil West and team are on the right track, specifically highlighting their efforts to “increase unit revenue and reduce operating cost” which he expects will “significantly improve profit margin over the next several years.” ^[93] Importantly, Ackman also noted Hertz’s capital structure – after bankruptcy, Hertz carries far less corporate debt – saying this will enable shareholders to reap “highly attractive return on investment.” ^[94] In essence, he sees a leaner, more efficient Hertz that can translate even modest revenue growth into outsized earnings growth. Ackman has put his money where his mouth is with a nearly 20% stake, making Pershing Square one of Hertz’s top two shareholders ^[95]. His involvement is generally seen as a vote of confidence in the company’s future. (It’s worth mentioning Ackman’s thesis had an interesting macro angle: he speculated that potential tariffs on imported cars could increase the value of Hertz’s largely domestic fleet – effectively a hedge that if new cars get pricier, Hertz’s existing cars become more valuable in comparison ^[96]. So far that’s a hypothetical scenario, but an example of the creative angles behind his investment.)

Sell-side equity analysts, however, are taking a more cautious stance in the near term. The current analyst consensus rating on HTZ is roughly “Hold” (neutral), skewing towards “Reduce/Sell”. Out of four analysts covering the stock, zero recommend it as a Buy ^[97]. Two have Hold ratings and two advise Sell, reflecting lingering concerns ^[98]. The average price target is around $4.50 per share ^[99], which is notably below the post-earnings trading price (~$5.5). Even the most optimistic analyst only has a $6.00 target, while the lowest is $2.70 ^[100] – a wide divergence that shows uncertainty about valuation. What’s behind this caution? Analysts likely want to see a track record of profitable quarters before fully trusting the turnaround. Hertz’s revenue is still slightly lower than pre-pandemic levels and than its 2019 run-rate, so skeptics wonder if the company can reignite growth or if cost cuts are doing all the heavy lifting (which might plateau eventually). Additionally, the car rental industry can face headwinds from a recession or oil price spikes; any sign of weakening travel demand could hurt Hertz’s recovery, and analysts are factoring in those risks.

Industry experts also point out the competitive and structural challenges ahead. For instance, some note that while Hertz has brilliantly capitalized on used-car market dynamics this year (selling cars at good prices, etc.), those dynamics could reverse. Used vehicle prices have been volatile – a glut of off-lease cars or rapid EV depreciation could increase Hertz’s fleet costs unexpectedly. Morgan Stanley’s analysts (to reference a hypothetical example) might say that they’re watching how sustainable the depreciation improvement is – if residual values fall, Hertz could face higher fleet costs again. Moreover, customer demand for EV rentals will be a space to watch; experts in sustainable transport suggest Hertz will need to carefully manage its EV strategy to align with consumer comfort and infrastructure build-out. Utility Dive’s report on Hertz’s EV retrenchment quotes the company’s acknowledgement of issues like collision expenses and residual values for EVs ^[101]. It also cites a McKinsey survey showing consumers remain wary of EV range and charging availability ^[102], explaining why Hertz hit some bumps in its EV rollout. Mobility analysts view Hertz’s EV experience as a lesson that adoption is gradual – and Hertz will have to get the timing right to avoid either overspending or falling behind competitors on electrification.

Some analysts have warmed slightly to Hertz after Q3. Zacks Equity Research, for instance, noted that Hertz not only beat on earnings but also on revenues, and highlighted key metrics improvements (like higher utilization and cost cuts) as signs of effective execution ^[103]. However, they also mention that year-over-year revenue was down and caution that investors should compare Hertz’s performance to industry peers to gauge relative strength ^[104] ^[105]. Zacks currently ranks Hertz as a #3 (Hold), indicating a balanced risk-reward.

On the technical side, some market commentators (on financial blogs or trading forums) have pointed out the high volatility and relatively low market capitalization of Hertz (around $2 billion), which can attract short-term traders. Short interest in HTZ has been notable – a portion of investors have been betting against the stock, perhaps doubting the turnaround or expecting dilution from any future equity raise. A short squeeze phenomenon already occurred partly with the Ackman news (shorts rushing to cover as the stock spiked). If Hertz continues to post good news, experts say another short covering rally could provide additional upside fuel. Conversely, if results stumble, those short sellers could be vindicated.

Finally, it’s worth noting customer and reputational factors: Hertz went through a rough patch with customer service during its bankruptcy period (even legal disputes about mistaken car theft reports, etc., which made news in 2022). The company has since worked to repair its brand image. Travel industry experts note that customer goodwill is returning – Hertz’s improved NPS suggests as much. But they advise watching rental car pricing trends: if a price war ensues in a weaker economy, all players including Hertz could see margins squeezed. For now, though, the expert consensus is that the oligopoly structure of the U.S. rental market (Hertz, Avis, Enterprise) should keep pricing rational. The fact that Avis and Hertz both disciplined fleet capacity during COVID and did not chase unprofitable volume is a positive sign that the industry learned from past periods of over-expansion.

In summary, expert opinion on Hertz spans cautious optimism to guarded skepticism. The Q3 results have certainly improved the bull case – demonstrating Hertz can be profitable and is on a better operational footing. Big investors like Ackman are clearly betting on a multi-year upswing. Yet, analysts and industry watchers are mindful of execution risks and external factors that could derail progress. The next few quarters will be crucial to converting the remaining skeptics. If Hertz can string together consistent profitable results and perhaps show a bit of revenue growth (even low-single-digit growth would be encouraging), Wall Street sentiment could shift more favorably. Until then, expect a diverse range of opinions – which is normal for a company emerging from a turnaround. That diversity of views is reflected in Hertz’s stock being somewhat undervalued relative to its peer (as bears see it as deserved, bulls see it as an opportunity).

Short-Term Outlook (Next 6–12 Months)

Looking to the immediate future, the short-term outlook for Hertz (HTZ) will depend on continued operational execution and external economic conditions. In the next couple of quarters (Q4 2025 and Q1 2026), Hertz faces some seasonality and headwinds, but also has tailwinds from its recent improvements.

One consideration is that Q4 is typically a seasonally slower quarter for car rentals compared to the summer (Q3). The holiday season in late Q4 does bring leisure travelers (especially around Thanksgiving and Christmas), but business travel tends to drop off toward year-end. Analysts will be watching to see if Hertz can remain profitable in Q4 as volumes ease from the summer peak. Notably, the company’s cost cuts and fleet right-sizing should help – with a leaner cost base, Hertz may be able to stay in the black even at lower winter utilization. The company hasn’t provided specific earnings guidance, but insiders expressed “low expectations” for H1 2025 earlier due to macro uncertainties ^[106]. Those concerns (tariffs, etc.) didn’t stop Hertz from surprising in Q3, but they could imply a conservative stance for Q4.

Another short-term factor is the broader economic climate. High interest rates and a potential economic slowdown in 2026 could impact discretionary travel. If there’s a mild recession scenario, corporate travel might soften and some leisure travelers might scale back plans or seek cheaper transportation alternatives. However, car rental has proven relatively resilient in recent travel downturns – for instance, even if people fly less, those who do travel still often need cars at their destinations, and road trip vacations can sometimes replace expensive international trips during belt-tightening. Moreover, Hertz can adjust its fleet purchase plans quickly if it anticipates lower demand, avoiding a glut of idle cars. As of now, U.S. travel demand remains healthy, with TSA airport passenger numbers in 2025 roughly back to 2019 levels or higher on many days. International inbound tourism (which boosts airport rentals) is also recovering. So in the short term, demand signals are decent, barring an unforeseen shock.

On pricing, the trend toward normalization may continue. We might see rental rates a few percentage points lower year-on-year as more rental cars are available industry-wide. Hertz won’t want to trigger a price war, but it may accept slightly lower rates to keep utilization high. Its goal of revenue per unit (RPU) over $1,500 per month remains, but achieving that might rely more on keeping cars rented more days rather than charging exorbitant rates ^[107] ^[108]. Investors should watch the balance between volume and pricing in Hertz’s upcoming results. A positive sign would be if Hertz can grow rental days (volume) enough to offset any rate softness, leading to flat or even rising revenue. The consensus for now expects relatively flat revenues in the next 12 months ^[109], so any growth would be a bonus that could prompt earnings upgrades.

Operationally, a key short-term focus is ensuring the fleet procurement for 2026 goes smoothly. Hertz mentioned it has secured orders for Model Year 2026 vehicles with the aim of maintaining sub-$300 depreciation costs ^[110]. Over the next 6 months, those orders will be placed with automakers. The timing and pricing will be critical: if car manufacturers raise prices or if interest costs for financing those cars rise, it could pressure Hertz’s cost targets. Conversely, if there are deals to be had (for instance, if EV makers with excess inventory offer Hertz attractive bulk pricing, or if Hertz can leverage its relationships for volume discounts on traditional cars), that could further boost margins.

Another short-term item: ongoing litigation or one-time charges. Hertz had, in the past, extraordinary charges (like settling customer lawsuits). Any resolution of remaining legal matters could cause a one-time expense in a quarter. However, the company has largely put the high-profile issues behind it by 2025. Still, investors will be alert for any “below-the-line” items.

In summary, for the next few quarters, cautious optimism is warranted. Hertz has the opportunity to consolidate its gains – proving Q3 was not a fluke but the start of a new era of consistent profitability. If Q4 2025 results come out and Hertz is still profitable (even if at a lower level due to seasonality) and demonstrates continued cost control, that could build confidence. Additionally, Hertz’s management might provide commentary on early 2026 booking trends; strong indications there (e.g. robust reservations for spring break or summer 2026) would bode well.

Investors should also watch Hertz’s moves in the EV space short-term. Interestingly, while Hertz scaled back its EV fleet, any news of a new EV procurement (at favorable terms) or a partnership (say with an automaker or charging network) could be a catalyst. Conversely, if oil prices spike over the winter, that could ironically drive some demand toward EV rentals (for consumers looking to save on gas) – Hertz could capitalize if it manages its remaining EV fleet smartly.

All told, the next 6–12 months for Hertz will be about execution and consistency. The heavy lifting of restructuring is done; now it’s about hitting singles and doubles each quarter. Short-term risks like macro slowdown or travel dips are real, but Hertz is better insulated now than before. As long as the company can navigate the seasonal troughs and keep costs aligned with demand, it is positioned to deliver solid, if not spectacular, results in the coming year. That in itself would be a win – turning Hertz from a story of volatile turnaround swings into a story of steady, “boring” profitability, which is exactly what many investors want to see in the short term.

Long-Term Outlook and Forecast

Looking beyond the next year, the long-term outlook for Hertz appears promising, albeit not without challenges. Over a multi-year horizon (2026 and beyond), Hertz’s trajectory will be shaped by how well it capitalizes on its revitalized operations, how it navigates industry evolution, and the overall macro/travel environment.

One key aspect of the long-term view is earnings growth potential. Hertz just proved it can achieve a ~7% net margin on $2.5B quarterly revenue ^[111]. If the company can even modestly grow its top line while holding costs in check, profits could scale impressively. For instance, suppose travel demand continues to expand 1-3% per year (in line with historical trends). If Hertz’s revenue grows at even a low-single-digit percentage annually in the coming years (through a combination of volume increases, modest pricing power, and new services), that could push annual revenues back toward or above pre-pandemic levels (Hertz did about $9.8B revenue in 2019). With its leaner cost base, one can envision Hertz eventually sustaining double-digit profit margins, especially if depreciation per vehicle remains low due to higher residual values (a structural shift compared to the 2010s when depreciation was much higher).

However, in forecasting, one must also consider possible headwinds. The rental industry is cyclical. We’ve just seen a huge cycle (down in 2020, up in 2021, normalization in 2023–25). Over the long term, competition from new mobility models could subtly erode some traditional rental market share. If autonomous ride-hailing becomes mainstream by late 2020s, perhaps business travelers opt for robotaxis over renting a car for short trips. Hertz’s counter to that is to be involved in those services (as a fleet manager or partner), effectively ensuring it has a piece of the pie. The long-term forecast for Hertz likely assumes it will indeed play a role in the autonomous era. The partnership moves by Avis (Waymo) and potential partnerships hinted for Hertz (Uber, etc.) suggest the big rental players will not be left out. In an optimistic scenario, Hertz could even develop its own autonomous fleet for rent – imagine renting a self-driving car from Hertz in 2030, where you don’t even need to drive it yourself. That may sound far-fetched, but it’s certainly plausible given the pace of AV tech (subject to regulatory approvals and safety, of course).

Another long-term element is fleet electrification. By, say, 2030, EVs will likely form a much larger percentage of rental fleets industry-wide, as automakers phase out some ICE models. Hertz’s early bold EV bets didn’t fully pan out, but the knowledge gained is valuable. Long-term, Hertz is still well-positioned to have one of the larger EV fleets (it already has thousands of Teslas, Polestars, etc.). EVs can actually be advantageous for rental companies in the long run: lower “fuel” cost (electricity vs gas) and potentially lower maintenance (fewer moving parts). The trick is managing upfront cost and residual risk. If Hertz can strike deals for EV supply at good prices (maybe via bulk orders or automaker partnerships), it could achieve good economics. The company’s continued commitment to EV strategy – including pushing manufacturers for better access to parts and service for EVs, as noted in filings ^[112] – indicates that in the long term, Hertz still envisions itself as a leader in offering electric rentals. One can forecast that by late this decade, perhaps 15-25% of Hertz’s fleet could be electric (maybe revisiting that earlier goal, but on a more realistic timeline).

Financially, analysts’ long-term models (where available) might project Hertz’s earnings several years out. While consensus is around $4.5 target now (likely using a conservative ~10x P/E on near-term earnings), if Hertz proves it can earn, say, $1.00 of EPS (which would be roughly $400M net income given share count) consistently in a couple years, the stock could re-rate higher. A growth or cyclical recovery story like this can often fetch a higher multiple once confidence in stability grows. Some bullish forecasts could see HTZ doubling from current levels over a few years if earnings ramp up and possibly if shareholder-friendly moves occur (like reinstating a dividend or share buybacks). Notably, Hertz’s board authorized a share buyback of up to $2 billion in late 2021 after it relisted, though it’s unclear how much was used; if the company generates excess cash, it could resume buybacks, which would support the stock.

Hertz’s long-term risks include the possibility of an economic downturn worse than expected (always a risk in a 5+ year view – e.g. another global crisis or a sharp recession could hurt travel). It also includes competitive pricing pressure – if, for instance, a new entrant (like a tech-enabled rental startup) tried to undercut pricing, or if peer-to-peer rentals gained significant share. Another risk: regulatory or cost issues such as rising airport concession fees, carbon emission regulations pushing costs, or even unionization drives (most rental car employees are not unionized, but any labor cost changes would affect margins).

On the flip side, long-term opportunities for Hertz are intriguing. The company could leverage its brand and fleet to expand into adjacent businesses. We already see hints: used car sales (Hertz could become a notable used car retailer if it builds that channel – it sold vehicles to over 30,000 retail buyers in 2022, for example), subscription services (monthly rentals as an alternative to car ownership), and partnerships with cities on mobility (Hertz has worked with mayors to deploy EVs and charging in cities ^[113]). The mobility ecosystem is growing and Hertz aims to be a key player, not just a legacy renter.

Considering all the above, a reasonable long-term forecast might be: Hertz continues moderate revenue growth in 2026–2027 (low single digits annually), primarily via higher volume and new services, possibly surpassing $10B annual revenue by 2027 if travel trends stay positive. EBITDA margins could expand with scale and tech efficiency (maybe reaching mid-20% range EBITDA margin, from teens now). That could yield annual EPS well above the recent $0.12 quarterly adjusted level – potentially $0.50–$1.00 per year in a few years’ time if all goes well. Under such a scenario, if the market assigns a multiple of, say, 10-15x earnings, the stock could trade materially higher than today (rough estimate, perhaps $7–10+ in a bullish case). Of course, this is an illustrative outlook; actual outcomes will hinge on execution and external factors.

In the long run, Hertz’s success will be measured by its ability to stay adaptable. The company survived a bankruptcy and emerged stronger – a testament to the underlying demand for its services and the power of a storied brand. If it can similarly navigate the next industry transformation (electrification and autonomy) and maintain fiscal discipline, Hertz could enjoy a renaissance over the coming decade. Some industry observers even speculate that if Hertz’s stock remains undervalued, it could become a takeover target or merge with another player (though regulatory hurdles exist for big combinations). More likely, Hertz itself will be on the hunt for growth opportunities, possibly acquisitions of smaller regional rental firms or tech platforms to bolster its offerings.

In conclusion, the long-term horizon for Hertz is cautiously optimistic. The company has moved from crisis to recovery, and is now entering a phase of rebuilding and growth. Investors with a long view will be watching for steady improvement in profitability, savvy investments in the future of mobility, and shareholder-friendly capital deployment. If Hertz delivers on those fronts, the stock’s best days may still lie ahead – a scenario where this nearly 105-year-old company continues to reinvent itself for the next generation of travelers and drivers.

Sources: Official earnings releases and filings; Reuters ^[114] ^[115], Bloomberg; Yahoo Finance; GuruFocus ^[116] ^[117]; Utility Dive (EV strategy) ^[118] ^[119]; TipRanks/Press releases (Avis results) ^[120] ^[121]; Reuters (Avis-Waymo partnership) ^[122] ^[123]; Pershing Square commentary ^[124]; MarketBeat (analyst forecasts) ^[125] ^[126]; Benzinga/Yahoo Finance (stock price moves) ^[127]; StockAnalysis (historical prices) ^[128].