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Herc Holdings (HRI) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Herc Holdings (HRI - Free Report) ? Shares have been on the move with the stock up 43.6% over the past month. The stock hit a new 52-week high of $179.39 in the previous session. Herc Holdings has gained 166.9% since the start of the year compared to the 4.4% move for the Zacks Transportation sector and the 35.2% return for the Zacks Transportation - Equipment and Leasing industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 22, 2021, Herc Holdings reported EPS of $1.57 versus consensus estimate of $1.08.
For the current fiscal year, Herc Holdings is expected to post earnings of $7.66 per share on $2.13 billion in revenues. This represents a 154.82% change in EPS on a 19.7% change in revenues. For the next fiscal year, the company is expected to earn $11.87 per share on $2.49 billion in revenues. This represents a year-over-year change of 54.82% and 16.78%, respectively.
Valuation Metrics
Herc Holdings may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Herc Holdings has a Value Score of D. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 23.1X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 9.3X versus its peer group's average of 6.4X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Herc Holdings currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Herc Holdings passes the test. Thus, it seems as though Herc Holdings shares could still be poised for more gains ahead.
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Herc Holdings (HRI) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Herc Holdings (HRI - Free Report) ? Shares have been on the move with the stock up 43.6% over the past month. The stock hit a new 52-week high of $179.39 in the previous session. Herc Holdings has gained 166.9% since the start of the year compared to the 4.4% move for the Zacks Transportation sector and the 35.2% return for the Zacks Transportation - Equipment and Leasing industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 22, 2021, Herc Holdings reported EPS of $1.57 versus consensus estimate of $1.08.
For the current fiscal year, Herc Holdings is expected to post earnings of $7.66 per share on $2.13 billion in revenues. This represents a 154.82% change in EPS on a 19.7% change in revenues. For the next fiscal year, the company is expected to earn $11.87 per share on $2.49 billion in revenues. This represents a year-over-year change of 54.82% and 16.78%, respectively.
Valuation Metrics
Herc Holdings may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Herc Holdings has a Value Score of D. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 23.1X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 9.3X versus its peer group's average of 6.4X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Herc Holdings currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Herc Holdings passes the test. Thus, it seems as though Herc Holdings shares could still be poised for more gains ahead.