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Herc Holdings Inc

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Herc Holdings Inc AI Insights

Informational only. Not investment advice.
As of 2026-01-30

Snapshot

  • Debt/equity of 5.1x with 349M interest expense TTM exceeds operating income (462M) - interest coverage razor thin at 1.3x[Debt to Equity]
  • Tangible book value is -2.6B; goodwill (2.9B) represents 152% of equity - material impairment risk[Goodwill]
  • Revenue grew 35% YoY but net income is -69M TTM; interest burden consuming operating profits[Net Income TTM]

Watch Triggers

  • Interest Expense TTM: Falls below 300M or rises above 400MAt 349M vs 462M operating income, 50M swing determines profitability
  • Free Cash Flow TTM: Turns positiveCurrently -186M; positive FCF enables deleveraging and removes refinancing risk
  • Total Debt: Declines below 9BAt 5.1x D/E, debt reduction is only path to sustainable equity value

Bull Case

Revenue growth 35% YoY (vs industry median 0.7%) and 5Y CAGR 23% indicates strong demand for equipment rental fleet

Total Revenue 1Y GrowthTotal Revenue 5Y Growth

EBITDA of 1.3B TTM (32% margin) provides cushion; rate cuts could rapidly improve net income

EBITDA TTMInterest Expense TTM

Bear Case

Negative FCF (-186M) with 9.8B debt and only 61M cash creates refinancing risk; no margin for error

Free Cash Flow TTMTotal DebtCash and Equivalents

P/E of 63x on depressed earnings; if rates stay elevated, equity could be severely impaired

PE RatioNet Margin TTM

Bull vs Bear Balance

AI-generated sentiment analysis based on fundamental metrics and market conditions.

BearBull
35%

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Forward Thesis

Interest expense trajectory will determine equity value - rates or debt reduction are existential

1-3yhigh
  • 349M annual interest vs 462M operating income
  • 9.8B total debt on 1.9B equity
  • FCF negative at -186M limits deleveraging
Interest expense 349M TTMNet income -69M despite 1.3B EBITDAFCF -186M TTM

Valuation Context

Caveats

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