What Happened?
Shares of global car rental company Hertz (NASDAQ: HTZ) jumped 8.2% in the afternoon session after Pershing Square Holdings recently reiterated its confidence in the company in its second-quarter 2025 investor letter. The investment firm, which began buying shares late last year, noted that it views Hertz as a turnaround story and believes the stock price "can increase by a multiple of our cost in reasonably likely scenarios.".
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What Is The Market Telling Us
Hertz’s shares are extremely volatile and have had 68 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 13 days ago when the stock dropped 3.3% after growing concerns from investors regarding the company's financial health and future prospects.
The negative sentiment follows a difficult period for the car rental company, which has seen its share price slump 25% over the last month. Financial data highlights some of the challenges, with revenues having fallen 7.6% over the last year. Compounding the issue, analysts forecast that revenue will continue to decline by 0.8% in the coming year. Further pressuring the stock are reports that Hertz has lost money in each of the last six reported quarters and carries a significant debt load, with $19.4 billion more debt than cash on its balance sheet. These persistent losses and financial burdens appear to be weighing heavily on investor confidence.
Hertz is up 58.8% since the beginning of the year, but at $5.93 per share, it is still trading 31.5% 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 $219.53.
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