Herc Rentals Inc. engages in the rental and lease of cars and trucks worldwide. It operates through four segments: U.S. Car Rental, International Car Rental, Worldwide Equipment Rental, and All Other Operations. The company rents various makes and models of cars, crossovers, and light trucks under the Hertz, Dollar, Thrifty, and Firefly car rental brands on hourly, daily, weekend, weekly, monthly, or multi-month basis through a network of company-owned rental airport and off-airport locations, as well as franchise locations. The company was founded in 1918 and is based in Estero, Florida.
HRI Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Herc Holdings Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Herc Holdings Inc ranked in the 87th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 1237.5% on a DCF basis. The most interesting components of our discounted cash flow analysis for Herc Holdings Inc ended up being:
Its compound free cash flow growth rate, as measured over the past 3.36 years, is 0.67% -- higher than 86.11% of stocks in our DCF forecasting set.
34% of the company's capital comes from equity, which is greater than merely 14.76% of stocks in our cash flow based forecasting set.
As a business, Herc Holdings Inc experienced a tax rate of about 6% over the past twelve months; relative to its sector (Industrials), this tax rate is higher than just 23.88% of stocks generating free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
SGRP, ACA, STCN, MYRG, and ARC can be thought of as valuation peers to HRI, in the sense that they are in the Industrials sector and have a similar price forecast based on DCF valuation.
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Debt-strapped Hertz Global Holdings (HTZ) announced on Friday that it has reached an interim $650 million settlement agreement with debtors to suspend litigation related to the car rental company’s plan to reduce its leased fleet of rental cars.The stock fell 5.4% to $1.58 at the close on Friday. Under the terms of the agreement, Hertz will pay a total of $650 million in cash of rent in equal monthly instalments from July to December this year. In addition, the car rental company will dispose of at least 182,521 leased vehicles between June and December.The vehicles are owned by a separate asset-backed finance facility (ABS), which Hertz leases back under a contract that gives lenders collateral rights. The $3.9 billion in proceeds from the car sales will be used to repay debt incurred ...