What Happened?
Shares of global car rental company Hertz (NASDAQ: HTZ) fell 3.4% in the morning session after ongoing concerns about its financial health and downbeat analyst ratings overshadowed a recent quarterly earnings beat. Even though Hertz recently reported second-quarter earnings that beat expectations, the positive news failed to convince investors of a sustained turnaround. Lingering issues are weighing on the stock, particularly a significant drop in free cash flow, which plummeted to negative $2.7 billion, raising concerns about the company's liquidity. Further adding to the pressure, several analysts maintained a negative outlook. BofA Securities reiterated its "Underperform" rating, citing "macroeconomic uncertainty and signs of travel demand waning." Similarly, Goldman Sachs maintained its "Sell" rating on the stock, believing the longer-term outlook remains challenging despite the recent quarterly performance. With a significant debt load of over $18.4 billion, investors seem to be focusing on these fundamental weaknesses rather than the short-term earnings surprise.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Hertz? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Hertz’s shares are extremely volatile and have had 72 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 15 days ago when the stock dropped 3.4% on the news that bellwether United Parcel Service (UPS) reported weak earnings and withheld its full-year guidance, citing “macro-economic uncertainty” and low consumer sentiment. The logistics giant reported a decline in revenue and missed profit estimates, sending a chill through the entire logistics chain. UPS pointed to a challenging economic environment and near-historic lows in U.S. consumer confidence as key factors for its performance.
By withholding its full-year forecast, the company signaled significant uncertainty ahead, confirming fears of a broader economic slowdown that could impact demand for shipping and freight services. This news weighed on other ground and rail transportation stocks, as investors worried that the headwinds affecting UPS could be a sign of wider issues across the industry.
Hertz is up 45.7% since the beginning of the year, but at $5.44 per share, it is still trading 37.2% below its 52-week high of $8.65 from April 2025. Investors who bought $1,000 worth of Hertz’s shares at the IPO in June 2021 would now be looking at an investment worth $201.37.
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