What Happened?
Shares of equipment rental company Herc Holdings (NYSE: HRI) jumped 5.8% in the morning session after it reported mixed third-quarter results, where a revenue beat appeared to overshadow an earnings miss and a disappointing full-year forecast.
The company announced that its revenue grew by 35.1% year-over-year to $1.3 billion, narrowly surpassing analyst expectations. This strong top-line growth appeared to fuel investor optimism despite some less favorable news in the report. On the other hand, Herc's adjusted earnings of $2.22 per share fell short of consensus estimates. Furthermore, the company's full-year revenue guidance of $3.8 billion, while reaffirmed, came in significantly below what analysts were projecting. Despite the earnings shortfall and weak outlook, the market seemingly focused on the impressive revenue growth.
Is now the time to buy Herc? Access our full analysis report here.
What Is The Market Telling Us
Herc’s shares are extremely volatile and have had 38 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 14 days ago when the stock gained 3.1% on the news that JPMorgan raised its price target on the company's stock to $140 from $127.
The investment firm's analyst, Tami Zakaria, made the adjustment while reaffirming a 'Neutral' rating on the shares. This revision signaled a more positive valuation for the equipment rental company. The change was part of a broader review of companies in the machinery and waste services sector ahead of their third-quarter reports. The new, higher price target from the influential bank appeared to boost investor confidence.
Herc is down 24.5% since the beginning of the year, and at $140.51 per share, it is trading 41.3% below its 52-week high of $239.28 from November 2024. Investors who bought $1,000 worth of Herc’s shares 5 years ago would now be looking at an investment worth $3,271.
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