Hertz Global Holdings, Inc. (HTZ): A Bull Case Theory

We came across a bullish thesis on Hertz Global Holdings, Inc. (HTZ) on Bill Ackman on X (Twitter). In this article, we will summarize the bulls’ thesis on HTZ. Hertz Global Holdings, Inc. (HTZ)’s share was trading at $7.05 as of 23^rd May. HTZ’s trailing and forward P/E were 23.71 and 11.78 respectively according to Yahoo Finance.

Hertz presents a compelling investment opportunity as both an operating company and a highly leveraged portfolio of automobiles. After acquiring a 19.8% stake, investors highlight four key drivers for value creation: an improving car rental industry structure marked by more rational competition, resolution of Hertz’s overexposure to Teslas which had previously caused operational and residual value issues, a promising operational turnaround led by CEO Gil West and his experienced management team, and the company’s leveraged capital structure.

The U.S. car rental market is a tight oligopoly dominated by Enterprise, Avis, and Hertz, with improving pricing discipline and strong profit potential demonstrated by Enterprise’s 20%+ margins. Hertz is actively rotating its fleet, shedding higher-cost vehicles to reduce depreciation expenses, increasing unit revenues, and cutting operating costs, all of which should drive meaningful margin expansion over the next several years. Despite current leverage, the company’s debt largely matures in 2028 and 2029, and Hertz has ample liquidity and financing capacity to support its fleet refresh and obligations.

The firm’s 500,000-car fleet valued at roughly $12 billion is well-positioned amid rising used car prices driven by tariffs, potentially boosting asset value by over $1 billion—half the current market cap. Management’s near-term targets imply adjusted EBITDA of about $2 billion by 2029, which at a conservative 7.5x multiple suggests a $30 per share valuation. While near-term results face headwinds from tariffs and travel industry softness, the intermediate outlook is for sustainably higher profits. A potential partnership with Uber on autonomous vehicle fleets could further unlock value, leveraging Hertz’s scale and infrastructure. Although risks remain, this thesis points to significant upside potential.

Hertz Global Holdings, Inc. (HTZ) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held HTZ at the end of the fourth quarter which was 30 in the previous quarter. While we acknowledge the risk and potential of HTZ as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than HTZ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.