Here's What Really Matters For Hertz

Shares of Hertz Global Holdings, Inc (NYSE: HTZ) fell roughly 15 percent and hit a new all-time low of $11.78 on Tuesday. Investors and traders were reacting to the car rental's earnings report, which fell well short of expectations.

Following the report, Chris Woronka of Deutsche Bank maintains a Hold rating on Hertz's stock with an unchanged $16 price target as the company's efforts to overhaul its business remain ongoing.

Q1 Review

Hertz's first-quarter adjusted earnings per share loss of $1.61 was "well below" the consensus estimate of a $0.90 per loss but was closer to the analyst's Street-low loss of $1.46 per share. Adjusted EBITDA of $110 million was well below the Street who was calling for a loss of $23 million but was also closer to the analyst's estimate of a $65 million loss.

Pricing for the quarter was down 2.8 percent, a figure which the analyst argued is "not terrible" although it does come against a negative 10.0 percent comp. As such, the two year-stacked decline of 12.8 percent represents a meaningful sequential deceleration from the two year-stacked decline seen in the fourth quarter. Also, per unit fleet costs in the U.S. was a main driver of the poor results, which rose 15 percent and was worse than the 9 percent expected.

Finally, the analyst noted Hertz didn't issue any guidance in its earnings release and wasn't expecting any to come from Tuesday morning's conference call.

Despite all of the woes in the quarter, Woronka believes Hertz's new management team continues to dedicate itself towards a "complete overhaul" of the company under a new management team. While investors may have reason to remain concerned and skeptical on the stock, the sentiment may change when "some kind of inflection becomes apparent."

At last check, shares had regained some of the losses from Monday's close, down 11.4 percent at $13.21 at time of publication.

Related Links:

Hertz Shareholders In Pain After Q1 Miss

'It Could Have Been Worse': The Best Way To Describe Hertz Q4 Results
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Image Credit: By Farhan from Karachi, Pakistan (Faisalabad Hertz) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

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