This is a step-by-step stock review to answer the question, is Hertz (HTZ) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is Hertz (HTZ) stock a good buy?
- Hertz Company History
- MOS (Margin of Safety)
- Meaning
- Moat
- Management
- 4M Score
- Is Hertz (HTZ) stock a good buy
1. Hertz Company History
When investing in stocks, it’s important to know the company’s history. This helps us understand the various revenue streams, if they acquired other companies, how they grew through difficult times, and how they separated themselves from the competition.
- Founded: Hertz was established in 1918.
- Founder: Walter L. Jacobs started the company in Chicago, Illinois.
- Early Years: Initially began with a fleet of a dozen Model T Fords.
- Acquisition: Acquired by John Hertz in 1923 and became part of the Yellow Truck and Coach Manufacturing Company.
- Expansion: Grew rapidly and became a nationwide brand, pioneering airport car rentals.
- Global Reach: Now operates in over 150 countries, with thousands of locations worldwide.
- Innovations: Introduced the first-ever car rental reservation system and the Hertz #1 Club Gold loyalty program.
- Fleet: Offers a diverse fleet, including luxury cars, SUVs, trucks, and electric vehicles.
- Subsidiaries: Owns Dollar Rent A Car and Thrifty Car Rental, expanding its market presence.
- Bankruptcy and Recovery: Filed for bankruptcy in 2020 due to the COVID-19 pandemic but successfully restructured and emerged in 2021.
- Technology: Invests in technology for streamlined reservations, contactless rentals, and mobile app enhancements.
- Sustainability: Committed to incorporating electric vehicles and eco-friendly practices in operations.
- Customer Service: Known for reliable service, a wide range of rental options, and convenient locations.
- Mission: To provide customers with a superior rental experience through innovation, quality, and customer service.
- Employee Focus: Emphasizes employee training and development to ensure high standards of service
2. MOS (Margin of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: Watch
- Score: 56
- MOS: 1%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how Hertz (HTZ) makes money:
- Car Rentals: Generates revenue from renting out vehicles to individuals and businesses for short-term use.
- Airport Rentals: Earns income from renting vehicles to travelers at airport locations worldwide.
- Fleet Management: Provides fleet management services to businesses, including vehicle acquisition, maintenance, and disposal.
- Insurance Products: Offers insurance products to renters, providing coverage for accidents, damage, and liability.
- Extended Warranty Plans: Sells extended warranty plans for rental vehicles, providing additional coverage for renters.
- Equipment Rentals: Offers equipment rental services, including tools, trucks, and specialty vehicles, to businesses and consumers.
- Corporate Accounts: Provides customized rental solutions for corporate clients, earning revenue through long-term rental agreements.
- Online Reservations: Generates revenue from online reservations made through the Hertz website and mobile app.
- Additional Services: Earns income from additional services such as GPS navigation, child safety seats, and roadside assistance.
- Lease and Financing: Offers vehicle leasing and financing options to customers and businesses, earning revenue through interest payments and fees.
- Travel Partnerships: Forms partnerships with airlines, hotels, and travel agencies to offer bundled travel packages and discounts, generating additional revenue streams.
- Used Car Sales: Sells used rental vehicles through its car sales division, earning revenue from vehicle sales and trade-ins.
- International Operations: Expands revenue streams by operating rental locations and providing services in international markets.
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Hertz stacks up against other companies.
- FTAI Aviation Ltd. (FTAI) – 78
- H&E Equipment Services, Inc.(HEES) – 78
- Willis Lease Finance Corporation(WLFC) – 67
- FTAI Aviation Ltd. (FTAIM) – 61
- Hertz Global Holdings, Inc. (HTZ) – 56
- FlexShopper, Inc. (FPAY) – 44
To see the most up-to-date Summary, Score, and MOS on each stock, please log into Tykr.
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- Smooth Leadership Transition: Gil West successfully took over as CEO of Hertz in April 2024, following a well-coordinated transition with former CEO Stephen Scherr.
- Operational Expertise: Leveraged his extensive experience in operational leadership from Delta Airlines and GM’s Cruise division to strengthen Hertz’s operations.
- Focus on Growth: Aimed to drive operationally-driven revenue and EBITDA growth, positioning Hertz for long-term success.
- Brand and Customer Focus: Committed to building on Hertz’s strong brand and improving customer loyalty through enhanced service and strategic initiatives.
- Strategic Projects: Continued the strategic projects initiated by his predecessor, including technological advancements and revitalization of Hertz’s value brands.
- Global Team Leadership: Provided leadership to Hertz’s global team of over 27,000 employees, enhancing service quality and operational efficiency.
These accomplishments demonstrate West’s focus on leveraging his operational expertise to drive growth and strengthen Hertz’s market position
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of Hertz is 55/100.
To see the most up-to-date 4M Score, please log into Tykr.
7. Is Hertz (HTZ) stock a good buy?
Some of the top questions investors can have is Hertz (HTZ) stock a good buy or should I buy Hertz (HTZ) stock?
Investing in Hertz poses significant risks due to the company’s recent bankruptcy filing and ongoing restructuring efforts. While Hertz is a well-known brand in the car rental industry, its financial challenges, exacerbated by the COVID-19 pandemic’s impact on travel, have cast uncertainty on its future prospects. The bankruptcy process typically involves significant debt restructuring, which may result in dilution or loss of value for existing shareholders. Additionally, Hertz faces stiff competition from both traditional rental car companies and emerging players in the transportation sector, further complicating its recovery path. While some investors may see potential turnaround opportunities in Hertz’s restructuring efforts, it’s essential to approach such investments with caution and thorough due diligence, considering the inherent volatility and uncertainties associated with companies undergoing bankruptcy proceedings
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To truly know if Hertz is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.
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