Shares sank 7.1% to $2.10 in early trading after Hertz reported third-quarter results that crystallized an uncomfortable pattern: the top line keeps growing, but profits keep falling short. The company posted earnings of $0.14 per share against analyst expectations of $0.22, a miss of roughly 36%. Revenue of $2.617 billion essentially matched the $2.62 billion consensus. For a stock already down more than 60% this year, the shortfall raises a blunt question: can cost improvements ever catch up to what Hertz owes?
Revenue Is Growing but Profits Aren't Keeping Pace
Management had guided Q3 adjusted corporate EBITDA to a range of $275–$325 million and promised positive EPS. The EPS miss suggests that even in Hertz's peak rental season, the gap between operational improvement and what Wall Street needs is widening. A year ago, the company earned just $0.12 per share on $2.48 billion in revenue — so year-over-year progress is real, but not fast enough to satisfy the market.
$18.7 Billion in Debt Eats Into Every Dollar of Progress
Hertz carried $18.7 billion in total debt as of June 30, including $12.7 billion of vehicle-related obligations and $6 billion of corporate debt.
Some of its fleet-financing notes carry interest rates above 10–12%. Every incremental dollar of EBITDA must first service that mountain of debt before shareholders see any benefit. Trailing twelve-month adjusted corporate EBITDA was negative $59 million , leaving essentially no cushion.
Fleet Costs Have Improved — But May Be Stalling
Net depreciation per vehicle per month — the cost of owning the cars Hertz rents — was $302 last quarter, and 94% of the U.S. fleet is now model-year 2025 or 2026. That is dramatically better than the crisis-era numbers, yet Q2 depreciation still rose 17% year-over-year to $487 million, driven by reduced gains on vehicle sales and weaker residual values. If used-car prices soften further, this line item becomes a headwind again.
Analyst Consensus Already Reflects Doubt
The average analyst price target sits at $2.13 — essentially the current price — with a consensus "Hold" rating.
Morgan Stanley recently trimmed its target to $2.50.
The stock's 52-week range of $1.45–$8.18 tells the story of a market that has steadily lost confidence in the pace of the turnaround. Until profits consistently clear the bar — not just approach it — shareholders remain along for a bumpy ride.