Hertz Global Holdings, Inc. (HTZ): A Bull Case Theory

We came across a bullish thesis on Hertz Global Holdings, Inc. on Vasileios Prassas’s Substack by Vasileios. In this article, we will summarize the bulls’ thesis on HTZ. Hertz Global Holdings, Inc.'s share was trading at $4.9400 as of February 5th. HTZ’s trailing and forward P/E were 23.71 and 11.78 respectively according to Yahoo Finance.

Hertz Global (HTZ) is the third-largest car rental company globally, operating in a highly consolidated industry where the top three players control roughly 95% of the market. Despite its iconic brand and scale, investor sentiment has collapsed due to fears of excessive leverage, negative free cash flow, and echoes of its 2020 bankruptcy, leaving the stock trading at just 2–4x normalized earnings.

At its core, Hertz functions less like a traditional rental company and more like an asset manager: it buys vehicles at scale, monetizes them through rentals, and ultimately sells them, making fleet economics, depreciation, and residual values the primary drivers of profitability. Small swings in used car prices can therefore have an outsized impact on cash flow.

Following its post-bankruptcy exit in 2021, Hertz initially benefited from surging used car prices, but misallocated those windfall cash flows into aggressive share buybacks and an ill-timed, large-scale push into electric vehicles. Falling used car prices and Tesla’s rapid price cuts forced Hertz to sell vehicles at losses, take write-downs, and borrow additional non-vehicle debt, pushing free cash flow deeply negative. These issues were compounded by an overly rapid fleet rotation.

Looking ahead, the thesis hinges on these mistakes being largely behind the company. The fleet has now been rotated at more reasonable prices, EV exposure has been rightsized, and losses have been recognized. As a result, cash flow has begun to stabilize, with EBITDA turning positive and seasonal de-fleeting expected to drive further deleveraging.

Liquidity remains ample, major debt maturities are pushed out to 2028–2029, and rising used car prices provide additional support. Even under conservative assumptions, Hertz appears capable of breaking even, while a normalization in operations could unlock substantial upside, setting the stage for a meaningful rerating if execution holds.

Previously, we covered a bullish thesis on Hertz Global Holdings, Inc. (HTZ) by Bill Ackman in May 2025, which highlighted improving industry structure, resolution of Tesla overexposure, an operational turnaround, and leverage-driven upside. HTZ’s stock price has depreciated by approximately 30% since our coverage. Vasileios Prassas shares a similar view but emphasizes Hertz’s asset-management economics, fleet rotation, and cash flow stabilization.

Hertz Global Holdings, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 44 hedge fund portfolios held HTZ at the end of the third quarter which was 39 in the previous quarter. While we acknowledge the risk and potential of HTZ as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HTZ and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.