Hertz Global Holdings Inc. (NASDAQ:HTZ) is one of the most recognized and established names in the global car rental and mobility industry, with a legacy that spans more than a century. Founded in 1918 by Walter Jacobs in Chicago with just a dozen Model T Fords, Hertz quickly grew into a pioneer in vehicle rentals and became synonymous with convenient, reliable transportation for both leisure and business travelers. The company’s innovative spirit and early focus on customer service helped it expand across the United States and eventually into international markets, making it one of the most trusted brands in mobility solutions.
Over the decades, Hertz has evolved beyond its origins as a simple car rental business into a diversified mobility provider. Operating under the Hertz, Dollar, and Thrifty brands, the company serves millions of customers annually through thousands of corporate and franchise locations across North America, Europe, Asia, Latin America, Africa, and the Middle East. Its network, combined with strong brand recognition, provides Hertz with a unique ability to capture demand across multiple customer segments, from budget-conscious renters to premium clients seeking luxury vehicles. This extensive reach has enabled Hertz to remain a central player in the travel, tourism, and corporate mobility ecosystem.
Hertz has consistently been at the forefront of innovation in the car rental industry. The company introduced services such as airport rental counters and loyalty programs that reshaped customer expectations for speed and convenience. It was also among the first to integrate technology into the rental process, offering mobile booking platforms and digital check-in solutions to simplify the customer experience. More recently, Hertz has focused on fleet modernization, strategic partnerships, and selective investments in electrification and digital transformation, further cementing its reputation as an adaptive and forward-looking company.
The company has faced significant challenges in recent years, including its highly publicized bankruptcy during the COVID-19 pandemic, which temporarily disrupted operations but ultimately led to a leaner balance sheet and renewed strategic focus. After restructuring and emerging from bankruptcy, Hertz has shifted toward a more disciplined operating model, emphasizing profitability, fleet efficiency, and market share recovery. While the company faced setbacks in its early push into electric vehicles, its decision to rebalance fleet composition reflects a pragmatic approach to aligning with evolving customer demand and long-term mobility trends.
Today, Hertz continues to benefit from its entrenched position in an industry dominated by a small number of players. Alongside Avis and Enterprise, Hertz controls a significant share of the U.S. rental car market, creating an oligopolistic structure with pricing power and competitive advantages. Globally, the company is positioned to take advantage of strong growth in car rentals driven by the recovery of international travel, rising tourism demand, and the growing preference for flexible mobility solutions. Its combination of a storied brand, global presence, strong market share, and renewed financial discipline makes Hertz not just a survivor of industry disruption but a company with the potential to thrive in the years ahead.
Earnings Show a Narrowing Loss and Signs of Progress
The second quarter of 2025 highlighted both challenges and progress. Hertz reported revenue of $2.18 billion, down from $2.35 billion in the prior year, reflecting a smaller fleet size and ongoing recalibration of its rental operations. However, net loss significantly narrowed to $294 million compared to $865 million a year ago. Loss per share improved dramatically to $0.95 from $2.82 in the same period last year. For the six-month period ended June 30, 2025, sales came in at $3.99 billion compared to $4.43 billion a year ago, while net loss fell to $737 million versus $1.05 billion previously. The reduction in losses shows that Hertz’s cost optimization strategy and fleet discipline are yielding tangible results. While top-line pressures remain, the company is building the financial base for a return to profitability.
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Operational Discipline and a Back-to-Basics Strategy
One of the key elements of Hertz’s turnaround is its renewed focus on fundamentals. Management has emphasized aligning fleet size and composition with real demand, optimizing vehicle utilization, and carefully managing depreciation costs. Vehicle depreciation in prior quarters showed double-digit improvements, underscoring the effectiveness of tighter fleet management. Selling, general, and administrative expenses have also been reduced, reflecting a disciplined approach to overhead costs. The second quarter’s improvement in net results demonstrates that Hertz is steadily regaining control of its cost structure, which had been pressured during years of aggressive expansion and a difficult transition into electric vehicles.
Benefiting from Market Tailwinds in Car Rental Demand
The broader car rental market is providing a strong backdrop for Hertz’s recovery. The U.S. car rental market, valued at nearly $38 billion in 2024, is projected to grow at a healthy compound annual growth rate through 2030, driven by rising travel demand, tourism rebound, and the shift toward rental as a flexible mobility solution. Globally, the car rental industry is expected to expand even more rapidly, supported by growth in international tourism and the rise of app-based and on-demand rental platforms. Hertz, with its established global footprint and recognized brand equity, is well positioned to capture this demand recovery. As international travel continues to normalize and business travel rebounds, Hertz’s utilization rates and revenue per unit stand to benefit meaningfully.
Strategic Reset on Electric Vehicles and Fleet Rotation
One of the most widely discussed aspects of Hertz’s recent history has been its ambitious push into electric vehicles. After announcing large EV purchases, the company faced challenges including higher maintenance costs, lower than expected demand, and impairment charges running into billions. However, management has since pivoted toward a more balanced fleet strategy, reducing exposure to EVs while keeping flexibility to reintroduce them as technology and consumer demand improve. By leaning into a diversified fleet rotation, Hertz is better positioned to manage costs, match demand with the right vehicles, and preserve residual value. This disciplined reset not only reduces near-term risks but also strengthens the long-term viability of the fleet.
High-Profile Investor Confidence Reinforces Upside Potential
The bullish case for Hertz is further supported by the conviction of high-profile investors such as Bill Ackman, whose Pershing Square Capital Management recently disclosed a significant stake in the company. Ackman views Hertz as a key player in a U.S. rental oligopoly with structural pricing power, strong asset backing in its vehicle fleet, and leverage to rising used-car values. The presence of such a respected activist investor not only provides credibility to the turnaround story but also suggests there could be further strategic catalysts, including operational enhancements, partnerships, or shareholder-friendly initiatives in the future.
Strong Balance Sheet and Liquidity to Support Turnaround
Despite recent losses, Hertz maintains a solid liquidity position with substantial cash and access to revolving credit facilities. This financial strength enables the company to continue refreshing its fleet, investing in technology, and repurchasing debt where appropriate. The reduction in net losses and improved cash flow trends suggest that Hertz has the runway needed to complete its turnaround. With each quarter showing incremental progress, the company is building a foundation for sustained profitability in the years ahead.
Conclusion: Building Momentum for Long-Term Growth
While Hertz’s second-quarter 2025 results revealed revenue softness, the dramatic narrowing of losses highlights the company’s improving financial health and operational execution. Cost controls, disciplined fleet management, and strategic resets are paying off, even as the broader rental car market provides favorable tailwinds. Investor confidence from leaders like Bill Ackman, coupled with Hertz’s entrenched position in a structurally concentrated industry, reinforces the long-term bullish thesis. For investors willing to weather near-term volatility, Hertz offers an attractive turnaround opportunity with meaningful upside as profitability returns and the company reclaims its standing as a dominant force in global mobility.
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