Hertz (HTZ) Stock Higher Ahead of Monday's Earnings Results
NEW YORK (TheStreet) -- Hertz Global Holdings (HTZ) - Get Report stock closed up by 4.38% to $18.83 on Friday, ahead of the release of the company's 2015 third quarter earnings results, due out before Monday's open.
Analysts are expecting the car rental company to post a year over year rise in earnings per share, but a decline in revenue.
Analysts surveyed by Thomson Reuters have forecast for earnings of 52 cents per share on revenue of $3.07 billion for the most recent quarter.
Last year, Hertz reported adjusted earnings of 48 cents per share on revenue of $3.12 billion for the 2014 third quarter.
Separately, TheStreet Ratings team rates HERTZ GLOBAL HOLDINGS INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
We rate HERTZ GLOBAL HOLDINGS INC (HTZ) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has slightly increased to $669.00 million or 4.20% when compared to the same quarter last year. In addition, HERTZ GLOBAL HOLDINGS INC has also modestly surpassed the industry average cash flow growth rate of -3.83%.
- 46.49% is the gross profit margin for HERTZ GLOBAL HOLDINGS INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, HTZ's net profit margin of 0.85% significantly trails the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 7.3%. Since the same quarter one year prior, revenues slightly dropped by 4.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The debt-to-equity ratio is very high at 7.41 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Road & Rail industry and the overall market, HERTZ GLOBAL HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: HTZ
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.