Herc Holdings Inc. (HRI): A Bull Case Theory

We came across a bullish thesis on Herc Holdings Inc. on Valueinvestorsclub.com by sag301. In this article, we will summarize the bulls’ thesis on HRI. Herc Holdings Inc.’s share was trading at $136.65 as of July 18^th. HRI’s trailing and forward P/E were 30.50 and 10.58 respectively according to Yahoo Finance.

Herc Holdings (HRI), the third-largest player in the North American equipment rental market, has strengthened its competitive position with the acquisition of H&E, expanding its network to 600 branches and securing a leading presence in most major rental markets. With a 6% market share and diversified exposure across non-residential, infrastructure, industrial, and commercial segments, HRI has evolved significantly since its spin-off from Hertz, adopting operational discipline similar to leaders Ashtead (AHT) and United Rentals (URI).

Industry consolidation and improved pricing discipline, underpinned by tools like Rouse Analytics, have structurally improved returns and operational resilience. The big three players benefit from procurement advantages, superior fleet utilization, and the ability to meet the complex demands of large contractors, with customer relationships reinforced by reliability and service responsiveness.

Rental penetration in the U.S. continues to rise, especially in specialty equipment, which offers higher margins, faster growth, and greater stickiness. HRI is positioned to benefit from sustained demand driven by U.S. mega projects and infrastructure spending, with national accounts already contributing nearly half of its revenue.

The company’s M&A strategy, focused on specialty assets, has been value accretive, with acquisitions typically devaluing to 3.5–4.5x EBITDA post-synergy. Despite having the narrowest moat of the top three, HRI trades at an attractive 8x FY26 earnings, offering mid-single-digit rental growth and margin expansion.

Its diversified end markets, variable cost structure, and improved capital discipline provide resilience in downturns, while potential strategic interest from private equity or larger peers offers downside support. Synergies from the H&E deal, robust construction activity, and policy-driven infrastructure spending serve as near-term catalysts.

Previously we covered a bullish thesis on Hertz Global Holdings, Inc. (HTZ) by Bill Ackman on X in May 2025, which highlighted an improving car rental industry structure, operational turnaround, and asset value upside. The stock has appreciated about 6.80% since, as the thesis began to play out. The thesis remains intact. sag301 shares a similar view on HRI, stressing its scale, structural tailwinds, and valuation.

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Disclosure: None.