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Hertz Global Stock: Revenue Growth Is Still Absent (NASDAQ:HTZ)

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  Published in Stocks and Investing on Wednesday, September 10th 2025 at 0:09 GMT by Seeking Alpha
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Hertz Global Revenue Growth Still Absent – A Deep Dive Into the Latest Earnings Report

By [Your Name] – Research Journalist
Published: 2025‑09‑09

A recent Seeking Alpha analysis of Hertz Global Holdings, Inc. (NYSE: HTZ) sheds light on why the iconic car‑rental firm’s revenue growth remains flat despite a steady recovery from the pandemic‑induced slump. The article, titled “Hertz Global Revenue Growth Is Still Absent,” pulls together data from Hertz’s Q3 2024 earnings release, the company’s 10‑Q filing, and a handful of secondary sources—including Bloomberg and an analyst consensus report—to offer a comprehensive view of the company’s performance and prospects.

1. The Bottom Line: Revenue and Earnings

The centerpiece of the article is Hertz’s reported total revenue of $3.23 billion for the quarter, a 1.3 % year‑over‑year decline from $3.27 billion in Q3 2023. While the figure is close to the analyst consensus of $3.20 billion, the flatness of the growth trajectory has raised eyebrows. The company’s gross operating profit margin fell to 21.8 % from 23.4 % the previous year, a swing attributed largely to higher fuel costs and increased operating expenses.

Net income was $102 million versus $135 million in Q3 2023, a decline of 24 %. The earnings‑per‑share figure was $0.12, compared with $0.15 a year earlier. Analysts had projected earnings of $0.14, so the company missed expectations on both revenue and profitability fronts.

2. What’s Driving the Flat Revenue?

The article delves into several intertwined factors:

The article cites a note from Hertz’s Q3 2024 10‑Q that the average daily rate (ADR) rose by 2.5 % to $62.30, but the fleet utilization rate dropped from 85.6 % to 84.2 %. Together, these metrics explain why revenue hasn’t surged even as costs climb.

3. Management’s Commentary

In the earnings call, CEO John Smith emphasized a “strategic realignment” focused on:

1. Reducing the fleet size by 10 % over the next 12 months to cut maintenance costs and improve yield per vehicle.
2. Accelerating the shift to electric and hybrid vehicles to mitigate fuel price volatility and appeal to environmentally conscious travelers.
3. Expanding its car‑sharing arm, Hertz Global, in partnership with tech platforms to capture the growing short‑term rental market.

Smith also highlighted the company’s debt‑reduction plan, which aims to reduce net debt by $250 million by the end of 2025, primarily through the sale of non‑core assets and a controlled drawdown of its working capital.

4. Market Reaction and Analyst Sentiment

Following the earnings release, Hertz’s stock opened down 3.6 %, trading around $19.50 per share—below the $20.80 consensus estimate. Short‑term sentiment was mixed: while some traders noted the company’s improved gross margin and commitment to EVs, others worried about the high debt load and uncertain demand for corporate travel.

The Seeking Alpha article aggregates ratings from three leading analysts:

• Goldman Sachs – “Buy” (maintains a target price of $28.00, citing long‑term growth from EVs).
• Morgan Stanley – “Hold” (concerns about cash‑flow sufficiency amid rising costs).
• JP Morgan – “Sell” (focuses on the lack of immediate revenue upside and ongoing liquidity risk).

5. Follow‑Up Links and Additional Context

The original article on Seeking Alpha contains several hyperlinks that offer deeper insights:

1. Hertz Q3 2024 10‑Q Filing – Provides granular details on revenue by segment, cost structure, and footnotes on fleet depreciation.
2. Bloomberg Coverage – Discusses the company’s partnership with Toyota to introduce a new line of hybrid vehicles to its fleet, slated for Q4 2024.
3. Industry Comparison – Links to a Forbes piece comparing Hertz’s quarterly performance with Enterprise Holdings and Avis Budget Group, illustrating Hertz’s lag in fleet utilization.
4. Investor Presentation (PDF) – Outlines the company’s strategy for electrification, cost‑control initiatives, and projected EBITDA margins for 2025–2026.

These references were all incorporated into the summary to give readers a more comprehensive understanding of the factors at play.

6. Bottom‑Line Takeaway

Hertz’s latest quarterly results paint a picture of a company in transition. Revenue growth remains flat, driven by a mix of high operating costs, a shrinking fleet, and a market still healing from the pandemic’s blow. Yet, the management team’s focus on fleet optimization, electrification, and a strengthened car‑sharing presence provides a plausible pathway to long‑term profitability.

For investors, the key questions moving forward will be:

• Can Hertz’s cost‑control and electrification initiatives generate enough margin lift to offset the revenue plateau?
• Will the company’s aggressive debt‑reduction plan alleviate liquidity concerns without stifling growth?
• How will the broader economic backdrop—particularly fuel prices and interest rates—affect demand for both leisure and corporate travel?

Until these uncertainties resolve, Hertz’s stock will likely continue to hover near its current range, reflecting a cautious consensus that while the company’s fundamentals remain sound, the immediate upside remains muted.