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Why Is Herc Holdings (HRI) Down 28.2% Since Last Earnings Report?
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A month has gone by since the last earnings report for Herc Holdings (HRI - Free Report) . Shares have lost about 28.2% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Herc Holdings due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Herc Holdings Inc. before we dive into how investors and analysts have reacted as of late.
Herc Holdings Q4 Earnings Beat Estimates
Herc Holdings’ fourth-quarter 2025 earnings per share (excluding $1.35 from non-recurring items) of $2.07 beat the Zacks Consensus Estimate of $1.84. Quarterly earnings declined 42.2% on a year-over-year basis, mainly due to high costs.
Quarterly revenues increased 27.1% year over year to $1.21 billion, but fell short of the Zacks Consensus Estimate of $1.26 billion. The year-over-year uptick was driven by the 23.8% increase in equipment rental revenues to $1.04 billion, supported by a larger average fleet following the June 2025 H&E acquisition.
Sales of rental equipment rose $51 million as the company accelerated disposals to optimize the acquired fleet's mix and utilization. Dollar utilization declined to 37.5% in the final quarter of 2025 from 40.6% a year ago, reflecting lower utilization on the acquired fleet ahead of optimization.
Adjusted EBITDA increased 18.5% to $519 million, but margin fell 320 bps to 42.9% as acquisition-related redundancies and lower fixed-cost absorption in moderated local markets weighed on profitability. Direct operating expenses represented 41.3% of equipment rental revenues compared with 38.6% in the prior-year quarter. Management cited a larger proportion of used equipment sold through the lower-margin auction channel and the fair value mark-up on acquired fleet sold as additional headwinds to margins in the period. Interest expense more than doubled to $134 million from $67 million on higher borrowings to fund the H&E transaction. The company continued to realign fleet toward higher-return categories and markets in the second half.
For full-year 2025, net rental equipment capex was $649 million (rental equipment expenditures of $1.09 billion offset by $448 million of proceeds) and the fleet ended the year at roughly $9.5 billion OEC with an average age of 45 months.
Balance sheet and cash flow
Liquidity was approximately $1.9 billion as of Dec. 31, 2025, with pro forma net leverage of 3.95x based on trailing 12-month adjusted EBITDA (including standalone H&E and excluding Cinelease). The company refinanced and extended maturities, including a new ABL credit facility and a 2034 senior notes issuance, and reported adjusted free cash flow of $521 million for fiscal 2025 (free cash flow of $299 million plus $222 million cash paid for transaction expenses).
Balance Sheet Reflects Acquisition-Driven Growth: Total assets were $13.8 billion at year-end compared with $7.9 billion a year earlier, with long-term debt, net, at $8 billion compared with $4.1 billion.
Encouraging 2026 Outlook
For 2026, management expects equipment rental revenues in the $4.275-$4.4 billion range (about 13% to 17% upside compared with 2025). Adjusted EBITDA is expected in the $2-$2.1 billion band, with net rental capex of $500-$800 million and gross capex between $800 million and $1.1 billion.
Management targets about $100-$120 million of incremental revenue synergies and expects the full $125 million cost-synergy run-rate to be realized in 2026. Free cash flow is projected in the $400-$600 million range, and utilization is expected to benefit from fleet mix alignment and network optimization as the year progresses.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -89.62% due to these changes.
VGM Scores
At this time, Herc Holdings has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock has a score of A on the value side, putting it in the top 20% for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Herc Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Herc Holdings (HRI) Down 28.2% Since Last Earnings Report?
A month has gone by since the last earnings report for Herc Holdings (HRI - Free Report) . Shares have lost about 28.2% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Herc Holdings due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Herc Holdings Inc. before we dive into how investors and analysts have reacted as of late.
Herc Holdings Q4 Earnings Beat Estimates
Herc Holdings’ fourth-quarter 2025 earnings per share (excluding $1.35 from non-recurring items) of $2.07 beat the Zacks Consensus Estimate of $1.84. Quarterly earnings declined 42.2% on a year-over-year basis, mainly due to high costs.
Quarterly revenues increased 27.1% year over year to $1.21 billion, but fell short of the Zacks Consensus Estimate of $1.26 billion. The year-over-year uptick was driven by the 23.8% increase in equipment rental revenues to $1.04 billion, supported by a larger average fleet following the June 2025 H&E acquisition.
Sales of rental equipment rose $51 million as the company accelerated disposals to optimize the acquired fleet's mix and utilization. Dollar utilization declined to 37.5% in the final quarter of 2025 from 40.6% a year ago, reflecting lower utilization on the acquired fleet ahead of optimization.
Adjusted EBITDA increased 18.5% to $519 million, but margin fell 320 bps to 42.9% as acquisition-related redundancies and lower fixed-cost absorption in moderated local markets weighed on profitability. Direct operating expenses represented 41.3% of equipment rental revenues compared with 38.6% in the prior-year quarter. Management cited a larger proportion of used equipment sold through the lower-margin auction channel and the fair value mark-up on acquired fleet sold as additional headwinds to margins in the period. Interest expense more than doubled to $134 million from $67 million on higher borrowings to fund the H&E transaction. The company continued to realign fleet toward higher-return categories and markets in the second half.
For full-year 2025, net rental equipment capex was $649 million (rental equipment expenditures of $1.09 billion offset by $448 million of proceeds) and the fleet ended the year at roughly $9.5 billion OEC with an average age of 45 months.
Balance sheet and cash flow
Liquidity was approximately $1.9 billion as of Dec. 31, 2025, with pro forma net leverage of 3.95x based on trailing 12-month adjusted EBITDA (including standalone H&E and excluding Cinelease). The company refinanced and extended maturities, including a new ABL credit facility and a 2034 senior notes issuance, and reported adjusted free cash flow of $521 million for fiscal 2025 (free cash flow of $299 million plus $222 million cash paid for transaction expenses).
Balance Sheet Reflects Acquisition-Driven Growth: Total assets were $13.8 billion at year-end compared with $7.9 billion a year earlier, with long-term debt, net, at $8 billion compared with $4.1 billion.
Encouraging 2026 Outlook
For 2026, management expects equipment rental revenues in the $4.275-$4.4 billion range (about 13% to 17% upside compared with 2025). Adjusted EBITDA is expected in the $2-$2.1 billion band, with net rental capex of $500-$800 million and gross capex between $800 million and $1.1 billion.
Management targets about $100-$120 million of incremental revenue synergies and expects the full $125 million cost-synergy run-rate to be realized in 2026. Free cash flow is projected in the $400-$600 million range, and utilization is expected to benefit from fleet mix alignment and network optimization as the year progresses.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -89.62% due to these changes.
VGM Scores
At this time, Herc Holdings has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock has a score of A on the value side, putting it in the top 20% for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Herc Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.