Herc Holdings Inc (NYSE: HRI)

Sector: Industrials Industry: Rental & Leasing Services CIK: 0001364479
Market Cap 5.00 Bn
P/B 2.57
P/E 5,004.00
P/S 1.14
ROIC (Qtr) 5.04
Div Yield % 1.87
Rev 1y % (Qtr) 27.13
Total Debt (Qtr) 9.68 Bn
Debt/Equity (Qtr) 4.97
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About

Herc Holdings Inc., also known as HRI, is a prominent player in the equipment rental industry, with a significant presence in North America. The company boasts an expansive network of 397 locations spread across 42 states in the United States and five provinces in Canada. Established over half a century ago, Herc Holdings has carved out a niche for itself as a full-line equipment rental supplier, offering a diverse range of equipment for rent. HRI's business activities span beyond equipment rental. The company also engages in the sale of used equipment,...

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Investment thesis

Bull case

  • Operating cash flow of 1.08B provides strong 31.91x coverage of stock compensation 34M, indicating sustainable incentive practices.
  • Strong operating cash flow of 1.08B provides 1.92x coverage of SG&A expenses 564M, showing efficient operational cost management.
  • Robust tangible asset base of 9.24B provides 40.88x coverage of working capital 226M, indicating strong operational backing.
  • Tangible assets of 9.24B provide robust 30.29x coverage of other current liabilities 305M, indicating strong asset backing.
  • Operating cash flow of 1.08B provides solid 1.49x coverage of current liabilities 730M, showing strong operational health.

Bear case

  • Operating cash flow of 1.08B barely covers its investment activities of (4.94B), with a coverage ratio of -0.22, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 1.08B provides thin coverage of dividend payments of (87M) with a -12.47 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 52M provide limited coverage of acquisition spending of (4.16B), which is -0.01x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of 299M provides weak coverage of capital expenditures of 786M, with a 0.38 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 417M show weak coverage of depreciation charges of 1.08B, with a 0.39 ratio indicating high capital intensity and potential reinvestment needs.

Product and Service Breakdown of Revenue (2025)

Geographical Breakdown of Revenue (2025)

Peer comparison

Companies in the Rental & Leasing Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 URI United Rentals, Inc. 55.62 Bn 22.30 3.45 15.35 Bn
2 FTAI FTAI Aviation Ltd. 27.80 Bn -179.72 106.00 3.45 Bn
3 AER AerCap Holdings N.V. 26.27 Bn 7.00 3.08 43.57 Bn
4 UHAL U-Haul Holding Co /NV/ 13.75 Bn 106.91 2.29 8.06 Bn
5 GATX Gatx Corp 9.00 Bn 53.16 6.81 9.03 Bn
6 R Ryder System Inc 8.88 Bn 17.80 0.70 7.65 Bn
7 AL Air Lease Corp 7.23 Bn 6.92 2.40 19.73 Bn
8 HRI Herc Holdings Inc 5.00 Bn 5,004.00 1.14 9.68 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.07 1.32
EV to Cash from Ops. EV/CFO 13.57 77.20
EV to Debt EV to Debt 1.52 3.45
EV to EBIT EV/EBIT 35.32 -105.66
EV to EBITDA EV/EBITDA 9.84 20.85
EV to Free Cash Flow [EV/FCF] EV/FCF 49.25 -1.38
EV to Market Cap EV to Market Cap 2.94 3.10
EV to Revenue EV/Rev 3.37 9.87
Price to Book Value [P/B] P/B 2.57 7.72
Price to Earnings [P/E] P/E 5,004.00 277.95
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.01 3.00
Dividend Payout Ratio % Div Payout % (Qtr) 9,333.30 500.03
Dividend per Basic Share Div per Share (Qtr) 2.80 1.19
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 29.31 6.22
Interest Coverage Int. cover (Qtr) 1.00 -60.94
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 13.72 17.05
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -37.35 54.66
Dividend Growth (1y) % Div 1y % (Qtr) 5.07 0.10
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 4.37 38.63
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 10.32 5.40
EBIT Growth (1y) % EBIT 1y % (Qtr) -24.32 2.84
EBT Growth (1y) % EBT 1y % (Qtr) -99.66 42.60
EPS Growth (1y) % EPS 1y % (Qtr) -99.60 243.85
FCF Growth (1y) % FCF 1y % (Qtr) -4.78 5.41
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 8.00 31.59
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.32 0.54
Cash Payout Ratio Cash Payout (Qtr) 0.05 0.03
Cash Ratio Cash Ratio (Qtr) 0.07 0.21
Current Ratio Curr Ratio (Qtr) 1.31 1.01
Debt to Equity Ratio Debt/Equity (Qtr) 4.97 20.57
Interest Cover Ratio Int Coverage (Qtr) 1.00 -60.94
Times Interest Earned Times Interest Earned (Qtr) 1.00 -60.94
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 34.20 35.32
EBIT Margin % EBIT Margin % (Qtr) 9.53 12.98
EBT Margin % EBT Margin % (Qtr) 0.02 3.50
Gross Margin % Gross Margin % (Qtr) 33.30 42.91
Net Profit Margin % Net Margin % (Qtr) 0.00 1.24