Hertz Global (HTZ) Stock Falls Today After Announcing New Revision of Financial Statements

NEW YORK (TheStreet) -- Hertz Global (HTZ) shares are down 6.73% to $21.20 on Friday after the company announced that in addition to restating its 2011 financial results due to accounting errors, it will also have to do the same for its 2012 and 2013 results.

The vehicle rental company was told in June that it was being investigated by the SEC over suspected accounting mistakes in it's financial disclosures. In response to that news Hertz began an internal audit of its financial statements that have turned up $87 million in errors so far.

The controversy, along with pressure from activist investor Carl Icahn who disclosed an 8% stake in the company in August, forced CEO Mark Frissora to resign in September after eight years with the company.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

The company also revealed its compensation package for interim CEO Brian Macdonald in today's announcement, stating that he will receive a base salary of $1.1 million along with an annualized cash incentive of $500,000.

TheStreet Ratings team rates HERTZ GLOBAL HOLDINGS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate HERTZ GLOBAL HOLDINGS INC (HTZ) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, good cash flow from operations, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • HTZ's revenue growth has slightly outpaced the industry average of 9.7%. Since the same quarter one year prior, revenues rose by 10.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • HERTZ GLOBAL HOLDINGS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, HERTZ GLOBAL HOLDINGS INC increased its bottom line by earning $0.76 versus $0.54 in the prior year. This year, the market expects an improvement in earnings ($1.47 versus $0.76).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 98.4% when compared to the same quarter one year prior, rising from -$36.80 million to -$0.60 million.
  • Net operating cash flow has increased to $738.00 million or 25.50% 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 20.51%.
  • 48.04% is the gross profit margin for HERTZ GLOBAL HOLDINGS INC which we consider to be strong. Regardless of HTZ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HTZ's net profit margin of -0.02% significantly underperformed when compared to the industry average.
  • You can view the full analysis from the report here: HTZ Ratings Report
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

More from Markets

3 Hot Reads From TheStreet's Top Premium Columnists

3 Hot Reads From TheStreet's Top Premium Columnists

Dow Falls, S&P 500 Trades Lower as P&G and Apple Slump

Dow Falls, S&P 500 Trades Lower as P&G and Apple Slump

Video: Jim Cramer on Apple, Procter & Gamble, Nucor and Acacia Communications

Video: Jim Cramer on Apple, Procter & Gamble, Nucor and Acacia Communications

Video: Jim Cramer Reveals Why Stocks Are Moving Lower Thursday

Video: Jim Cramer Reveals Why Stocks Are Moving Lower Thursday

Soaring Nickel Prices Could Be Bad News for Electric Carmakers Like Tesla

Soaring Nickel Prices Could Be Bad News for Electric Carmakers Like Tesla