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Is Herc Holdings (HRI) Stock Undervalued Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Herc Holdings (HRI - Free Report) is a stock many investors are watching right now. HRI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 9.76, while its industry has an average P/E of 10.94. Over the last 12 months, HRI's Forward P/E has been as high as 26.21 and as low as 9.08, with a median of 12.82.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HRI has a P/S ratio of 0.62. This compares to its industry's average P/S of 1.06.

Finally, our model also underscores that HRI has a P/CF ratio of 2.19. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. HRI's P/CF compares to its industry's average P/CF of 6.95. HRI's P/CF has been as high as 2.59 and as low as 1.03, with a median of 2.15, all within the past year.

These are only a few of the key metrics included in Herc Holdings's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, HRI looks like an impressive value stock at the moment.


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