We came across one bullish thesis to Hertz Global Holdings, Inc. in Vasileios Prassas’s Vasileios Substack. In this article, we will summarize the bulls’ thesis on HTZ. The stock of Hertz Global Holdings, Inc. it was trading at $4.9400 on February 5. According to Yahoo Finance, HTZ’s trailing and forward P/E were 23.71 and 11.78, respectively.

nito/Shutterstock.com

Hertz Global (HTZ) is the world’s third-largest car rental company, operating in a highly consolidated industry where the top three players control approximately 95% of the market. Despite its iconic brand and scale, investor sentiment has collapsed amid fears of excessive leverage, negative free cash flow and echoes of its 2020 bankruptcy, leaving the stock trading at just 2-4 times normalized earnings.

At its core, Hertz operates less like a traditional rental company and more like an asset manager: it buys vehicles at scale, monetizes them through rentals, and ultimately sells them, making fleet economics, depreciation and residual values ​​the main drivers of profitability. Therefore, small changes in used car prices can have an outsized impact on cash flow.

After its post-bankruptcy exit in 2021, Hertz initially benefited from rising used car prices, but misallocated those windfalls in aggressive share buybacks and an ill-timed, large-scale push into electric vehicles. Falling used car prices and Tesla’s rapid price cuts forced Hertz to sell vehicles at a loss, downgrade and borrow additional non-vehicle debt, driving deeply negative free cash flow. These problems were compounded by too rapid fleet turnover.

Looking ahead, the thesis depends that these mistakes are largely behind the company. Now the fleet has been rotated to more reasonable prices, exposure to electric vehicles has been adjusted and losses have been recognised. As a result, cash flow has started to stabilize, with EBITDA turning positive and seasonal deleveraging expected to drive further deleveraging.

Liquidity remains ample, major debt maturities are pushed out to 2028-2029 and rising used car prices provide additional support. Even under conservative assumptions, Hertz looks capable of breaking even, while a normalization of operations could unlock substantial upside, setting the stage for a significant revaluation if the run holds.

Previously, we covered a bullish thesis to Hertz Global Holdings, Inc. (HTZ) by Bill Ackman in May 2025, which highlighted improving sector structure, resolution of overexposure to Tesla, an operational turnaround, and boosted leverage. HTZ’s share price has depreciated approximately 30% since our coverage. Vasileios Prassas shares a similar view, but emphasizes the economics of Hertz’s asset management, fleet rotation and cash flow stabilization.