HTZ is now undervalued and could go up 1150%
Hertz Global Holdings, headquartered in Estero, Florida, operates vehicle rentals through Hertz, Dollar, and Thrifty brands, employing 27,000 staff across 11,400 locations in 160 countries. The company went public on July 30, 2021.
Based on our analysis, Hertz Global Holdings (New) has received an undervalued rating of 5 out of 5 stars from Cashu. This conclusion is drawn from a close examination of key financial ratios that indicate significant discrepancies between Hertz and its sector peers.
The price-to-book (PB) ratio for Hertz stands at 7.34, considerably higher than the sector average of 2.48. A high PB ratio can suggest that the stock is overvalued, but in Hertz's case, it may reflect investor concerns that are not fully priced into the stock.
Moreover, Hertz has a net profit margin of -31.63%, starkly contrasting with the sector's modest positive margin of 0.92%. This negative margin indicates that the company is currently struggling to generate profit from its revenues, which may cause investors to undervalue its stock despite potential future recoveries.
The return on equity (ROE) ratio for Hertz is an alarming -1870.59, compared to the sector's 2.33. Such a negative ROE indicates that the company is not effectively using shareholder equity to generate profits, contributing to a bearish outlook among investors.
Additionally, the return on assets (ROA) ratio is -13.13, while the sector average is 0.47. This indicates inefficiency in utilizing its assets to produce earnings, reinforcing the notion of undervaluation as the company works towards recovery.
Overall, while the financial metrics paint a challenging picture, they also reveal potential for future improvement, providing a compelling case for considering Hertz as undervalued.
This is not a comprehensive overview of our valuation, and should not be viewed as financial advice. Always do your own research before considering an investment.
