What Happened?
Shares of global car rental company Hertz (NASDAQ: HTZ) fell 0.7% in the afternoon session after the company reported first-quarter 2026 financial results that, despite beating revenue estimates and meeting earnings expectations, revealed significant underlying losses and deteriorating profitability.
Although revenue grew 10.5% year-over-year to $2.0 billion, the company's adjusted loss of $0.72 per share was only in line with analyst expectations, and other key metrics pointed to significant financial strain. The company's Adjusted EBITDA, a measure of operational profitability, was negative $161 million, translating to a margin of -8%, a sharp decline from 17.7% in the same quarter last year. Adding to concerns, Hertz burned through $3.58 billion in cash, a substantial increase from the $578 million used in the same period a year ago, raising questions about its financial stability.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Hertz? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Hertz’s shares are extremely volatile and have had 55 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 15 days ago when the stock dropped 8.6% on the news that Northcoast Research downgraded the stock to Sell from Neutral and set a $5 price target.
The downgrade highlighted several concerns about the company's financial health and market position. Analysts pointed to weakening pricing power and a strong used-car market, which hurts the resale values of Hertz's fleet. The firm's research also underscored Hertz's underlying financial struggles, noting the company posted a full-year 2025 net loss of $747 million.
Hertz is up 23.1% since the beginning of the year, but at $6.43 per share, it is still trading 19.4% below its 52-week high of $7.97 from July 2025. Investors who bought $1,000 worth of Hertz’s shares at the IPO in June 2021 would now be looking at an investment worth $238.05.
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