Why Hertz Global Holdings (HTZ) Is Up Today

Tickers in this article: HTZ

NEW YORK (TheStreet) -- Hertz Global Holdings  was rising 2.8% to $27.65 on Wednesday after the company announced the debut of the newest version of its mobile app on iTunes.

The latest version of the app features a redesigned interface and multiple new features to increase customer convenience, including faster reservations, persistent login and the ability to access the app in airplane mode in order to reschedule and update rentals.

"We listen closely to the feedback customers provide us. They wanted a new and improved app and we delivered," said Chairman and CEO Mark P. Frissora in a company statement. "At Hertz we strive to make the rental experience as fast, easy and enjoyable as possible, and our new innovations and technologies, including the redesigned mobile app, are just the start of what's to come."

TheStreet Ratings team rates Hertz Global as a "buy" with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate HERTZ GLOBAL HOLDINGS INC (HTZ) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 2.8%. Since the same quarter one year prior, revenues rose by 22.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $1,393.00 million or 43.38% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 5.20%.
  • Compared to its closing price of one year ago, HTZ's share price has jumped by 55.28%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • HERTZ GLOBAL HOLDINGS INC's earnings per share declined by 14.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HERTZ GLOBAL HOLDINGS INC increased its bottom line by earning $0.54 versus $0.38 in the prior year. This year, the market expects an improvement in earnings ($1.70 versus $0.54).
  • The gross profit margin for HERTZ GLOBAL HOLDINGS INC is rather high; currently it is at 53.17%. Regardless of HTZ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HTZ's net profit margin of 6.99% is significantly lower than the industry average.