Hertz Global (HTZ) Stock: Falling Apart on Poor Earnings

Hertz Global Holdings Inc. (NYSE: HTZ)

Hertz Global Holdings is having an incredibly rough day in the market today, and for good reason. The company released its financial results for the third quarter, missing expectations in a big way. Below, we’ll talk about what we saw from the earnings report, how the stock reacted to the news, and what we can expect to see from HTZ ahead.

HTZ Reports Q3 Financial Results

As mentioned above, Hertz Global Holdings is not having the best of days in the market today. The company released its report for the third quarter, missing expectations and leading to concerns among investors. Here’s what we saw from the report…

  • Earnings Per Share – In terms of earnings per share, HTZ missed the mark in a big way. During the third quarter, analysts expected that the company would generate earnings in the amount of $2.75 per share. However, the company actually reported earnings there were $1.17 per share lower than expected at $1.58 per share. While this blew away the $0.49 per share realized in the same quarter last year, the big miss with regard to expectations is incredibly concerning.
  • Revenue – In terms of revenue, the report proved to cause more concerns. During the third quarter, analysts expected that HTZ would generate revenue in the amount of $2.60 billion. However, the company missed the mark there too, producing revenue in the amount of $2.50 billion.

How The Stock Reacted To The News

As investors, one of the first things that we learn is that the news moves the market. That is especially true when it comes to earnings news. At the end of the day, strong earnings results will generally lead to strong gains in the market. However, Hertz Global Holdings produced a report that was anything but positive. With the incredibly negative earnings report in mind, we’re seeing an incredibly negative reaction in the market. Currently (10:53), the stock is trading at $17.90 per share after a loss of $17.84 per share or 49.92% thus far today.

What I’m Expecting To See Ahead

First and foremost, the earnings report that HTZ released for the third quarter was overwhelmingly negative, and something needs to be done there. So, some of the declines we’re seeing are definitely warranted. However, cutting the value in half is a bit of an overreaction. With that said, I’m expecting to see a correction within the next few trading sessions that will bring the stock back to a more realistic rate.

In the long run, I have a relatively mixed opinion of what we can expect to see. First and foremost, Hertz has built an incredible brand that has become a household name. However, with low cost ride sharing programs and ever increasing competition in the transportation arena, the company definitely has some hurdles to get over. At the end of the day, there’s a strong opportunity for long run gains here, but strong opportunities generally come with risk.

What Do You Think?

Where do you think HTZ is headed moving forward? Join the discussion in the comments below!