📊 HRI Key Takeaways
Is Herc Holdings Inc. (HRI) a Good Investment?
HERC is fundamentally unprofitable with negative operating income (-$23M) and margins (-2.1% net margin), despite impressive 408% revenue growth. The company carries a concerning 4.19x debt-to-equity ratio with insufficient operating income to cover interest payments, presenting refinancing risk. While strong free cash flow generation ($236M, 20.7% margin) suggests non-cash charges are depressing reported earnings, the inability to achieve profitability at scale and elevated leverage pose material downside risk.
Herc exhibits exceptional revenue growth and strong cash generation with a robust free cash flow margin, suggesting resilient rental cash economics. However, reported profitability has collapsed to near breakeven with zero interest coverage and elevated leverage, leaving little buffer if conditions worsen. A neutral stance is warranted until operating margins and coverage improve and debt is reduced.
Why Buy Herc Holdings Inc. Stock? HRI Key Strengths
- Exceptional free cash flow generation ($236M) despite accounting losses indicates cash-generative core operations
- Massive revenue growth (407.7% YoY) suggests successful market penetration or strategic acquisition
- Adequate short-term liquidity (1.46x current ratio) to meet near-term obligations
- High FCF margin (20.7%) indicates efficient conversion of revenue to distributable cash in equipment rental business
- Strong operating and free cash flow (FCF margin ~21%)
- Solid near-term liquidity (current/quick >1)
- Significant revenue growth and scale expansion
HRI Stock Risks: Herc Holdings Inc. Investment Risks
- Negative interest coverage ratio (-0.2x) indicates operating income insufficient to cover debt service; refinancing or restructuring risk likely
- Persistent unprofitability across all metrics (negative net margin, ROE, ROA) despite scale suggests structural margin compression
- Very high leverage (4.19x debt-to-equity, $8B debt vs $1.9B equity) limits financial flexibility and increases bankruptcy risk
- Unexplained 408% revenue growth likely driven by acquisition; integration risks, goodwill impairment, and one-time charges may persist
- Minimal cash position ($43M) insufficient to handle unexpected disruptions given $8B debt burden
- High leverage (D/E ~4.1x) with low cash balance
- Near-zero margins and ROE; interest coverage at 0x
- Cyclical rental demand and utilization/price pressure
Key Metrics to Watch
- Operating margin trajectory - profitability must inflect positive or refinancing becomes critical
- Interest coverage ratio improvement - must reach 1.5x+ to indicate sustainable debt service
- Debt-to-equity reduction below 3.5x - current leverage constrains financial flexibility
- Free cash flow sustainability - confirm $236M is repeatable, not acquisition-related anomaly
- Revenue growth normalization - distinguish organic vs. acquisition-driven growth
- Operating margin
- Interest coverage
Herc Holdings Inc. (HRI) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 20.7% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments.
HRI Profit Margin, ROE & Profitability Analysis
HRI vs Industrial Sector: How Herc Holdings Inc. Compares
How Herc Holdings Inc. compares to Industrial sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Herc Holdings Inc. Stock Overvalued? HRI Valuation Analysis 2026
Based on fundamental analysis, Herc Holdings Inc. shows some fundamental concerns relative to the Industrial sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Herc Holdings Inc. Balance Sheet: HRI Debt, Cash & Liquidity
HRI Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Herc Holdings Inc.'s revenue has remained relatively flat over the 5-year period, with a 0% decline. The most recent EPS of $12.09 reflects profitable operations.
HRI Revenue Growth, EPS Growth & YoY Performance
HRI Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $170.0M | -$18.0M | $-0.63 |
| Q3 2025 | $157.0M | -$18.0M | $-0.75 |
| Q2 2025 | $136.0M | -$18.0M | $-1.17 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Herc Holdings Inc. Dividends, Buybacks & Capital Allocation
HRI SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Herc Holdings Inc. (CIK: 0001364479)
📋 Recent SEC Filings
❓ Frequently Asked Questions about HRI
What is the AI rating for HRI?
Herc Holdings Inc. (HRI) has a Combined AI Rating of SELL from Claude (SELL) and ChatGPT (HOLD) with 65% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are HRI's key strengths?
Claude: Exceptional free cash flow generation ($236M) despite accounting losses indicates cash-generative core operations. Massive revenue growth (407.7% YoY) suggests successful market penetration or strategic acquisition. ChatGPT: Strong operating and free cash flow (FCF margin ~21%). Solid near-term liquidity (current/quick >1).
What are the risks of investing in HRI?
Claude: Negative interest coverage ratio (-0.2x) indicates operating income insufficient to cover debt service; refinancing or restructuring risk likely. Persistent unprofitability across all metrics (negative net margin, ROE, ROA) despite scale suggests structural margin compression. ChatGPT: High leverage (D/E ~4.1x) with low cash balance. Near-zero margins and ROE; interest coverage at 0x.
What is HRI's revenue and growth?
Herc Holdings Inc. reported revenue of $1.1B.
Does HRI pay dividends?
Herc Holdings Inc. pays dividends, with $24.0M distributed to shareholders in the trailing twelve months.
Where can I find HRI SEC filings?
Official SEC filings for Herc Holdings Inc. (CIK: 0001364479) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is HRI's EPS?
Herc Holdings Inc. has a diluted EPS of $-0.72.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is HRI a good stock to buy right now?
Based on our AI fundamental analysis in May 2026, Herc Holdings Inc. has a SELL rating with 65% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is HRI stock overvalued or undervalued?
Valuation metrics for HRI: ROE of -1.3% (sector avg: 15%), net margin of -2.1% (sector avg: 10%). Compare these metrics with sector averages to assess valuation.
Should I buy HRI stock in 2026?
Our dual AI analysis gives Herc Holdings Inc. a combined SELL rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is HRI's free cash flow?
Herc Holdings Inc.'s operating cash flow is $277.0M, with capital expenditures of $41.0M. FCF margin is 20.7%.
How does HRI compare to other Industrial stocks?
Vs Industrial sector averages: Net margin -2.1% (avg: 10%), ROE -1.3% (avg: 15%), current ratio 1.46 (avg: 1.8).
Is Herc Holdings Inc. carrying too much debt?
HRI has a debt-to-equity ratio of 4.19x, which is above the Industrial sector average of 0.7x. However, the current ratio of 1.46 suggests adequate short-term liquidity.