HERC HOLDINGS INC (HRI) Stock Fundamental Analysis
NYSE:HRI - New York Stock Exchange, Inc. - US42704L1044 - Common Stock - Currency: USD
Overall HRI gets a fundamental rating of 5 out of 10. We evaluated HRI against 48 industry peers in the Trading Companies & Distributors industry. HRI scores excellent on profitability, but there are concerns on its financial health. HRI has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
HRI had positive earnings in the past year.
In the past year HRI had a positive cash flow from operations.
HRI had positive earnings in each of the past 5 years.
HRI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
HRI's Return On Assets of 2.68% is in line compared to the rest of the industry. HRI outperforms 41.67% of its industry peers.
HRI's Return On Equity of 15.11% is fine compared to the rest of the industry. HRI outperforms 62.50% of its industry peers.
HRI has a Return On Invested Capital (7.62%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for HRI is in line with the industry average of 9.25%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.68% | ||
| ROE | 15.11% | ||
| ROIC | 7.62% |
ROA(3y)4.38%
ROA(5y)4.04%
ROE(3y)24.04%
ROE(5y)21%
ROIC(3y)7.69%
ROIC(5y)7%
1.3 Margins
HRI's Profit Margin of 5.91% is fine compared to the rest of the industry. HRI outperforms 66.67% of its industry peers.
HRI's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 20.82%, HRI belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
HRI's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 61.29%, HRI belongs to the best of the industry, outperforming 93.75% of the companies in the same industry.
In the last couple of years the Gross Margin of HRI has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.82% | ||
| PM (TTM) | 5.91% | ||
| GM | 61.29% |
OM growth 3Y4.56%
OM growth 5Y10.96%
PM growth 3Y-18.21%
PM growth 5Y20%
GM growth 3Y1.25%
GM growth 5Y3.11%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so HRI is destroying value.
Compared to 1 year ago, HRI has more shares outstanding
Compared to 5 years ago, HRI has less shares outstanding
The debt/assets ratio for HRI has been reduced compared to a year ago.
2.2 Solvency
HRI has an Altman-Z score of 1.22. This is a bad value and indicates that HRI is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of HRI (1.22) is worse than 77.08% of its industry peers.
The Debt to FCF ratio of HRI is 261.94, which is on the high side as it means it would take HRI, 261.94 years of fcf income to pay off all of its debts.
HRI has a Debt to FCF ratio (261.94) which is comparable to the rest of the industry.
A Debt/Equity ratio of 2.99 is on the high side and indicates that HRI has dependencies on debt financing.
HRI's Debt to Equity ratio of 2.99 is on the low side compared to the rest of the industry. HRI is outperformed by 83.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.99 | ||
| Debt/FCF | 261.94 | ||
| Altman-Z | 1.22 |
ROIC/WACC0.81
WACC9.37%
2.3 Liquidity
A Current Ratio of 1.38 indicates that HRI should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.38, HRI is doing worse than 66.67% of the companies in the same industry.
HRI has a Quick Ratio of 1.38. This is a normal value and indicates that HRI is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Quick ratio value of 1.38, HRI is doing good in the industry, outperforming 64.58% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.38 | ||
| Quick Ratio | 1.38 |
3. Growth
3.1 Past
HRI shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.97%.
Measured over the past years, HRI shows a very strong growth in Earnings Per Share. The EPS has been growing by 48.42% on average per year.
The Revenue has grown by 8.71% in the past year. This is quite good.
HRI shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 12.29% yearly.
EPS 1Y (TTM)4.97%
EPS 3Y19.73%
EPS 5Y48.42%
EPS Q2Q%10.49%
Revenue 1Y (TTM)8.71%
Revenue growth 3Y19.84%
Revenue growth 5Y12.29%
Sales Q2Q%14.44%
3.2 Future
Based on estimates for the next years, HRI will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.33% on average per year.
HRI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.29% yearly.
EPS Next Y2.13%
EPS Next 2Y9.39%
EPS Next 3Y12.12%
EPS Next 5Y10.33%
Revenue Next Year3.93%
Revenue Next 2Y4.87%
Revenue Next 3Y5.59%
Revenue Next 5Y5.29%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
HRI is valuated reasonably with a Price/Earnings ratio of 8.65.
Based on the Price/Earnings ratio, HRI is valued cheaply inside the industry as 95.83% of the companies are valued more expensively.
HRI's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.63.
The Price/Forward Earnings ratio is 8.47, which indicates a very decent valuation of HRI.
Based on the Price/Forward Earnings ratio, HRI is valued cheaply inside the industry as 89.58% of the companies are valued more expensively.
HRI is valuated cheaply when we compare the Price/Forward Earnings ratio to 20.85, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.65 | ||
| Fwd PE | 8.47 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HRI is valued cheaply inside the industry as 91.67% of the companies are valued more expensively.
HRI's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 198.47 | ||
| EV/EBITDA | 4.82 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates HRI does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of HRI may justify a higher PE ratio.
HRI's earnings are expected to grow with 12.12% in the coming years. This may justify a more expensive valuation.
PEG (NY)4.06
PEG (5Y)0.18
EPS Next 2Y9.39%
EPS Next 3Y12.12%
5. Dividend
5.1 Amount
HRI has a Yearly Dividend Yield of 2.38%. Purely for dividend investing, there may be better candidates out there.
In the last 3 months the price of HRI has falen by -47.17%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 2.26, HRI pays a better dividend. On top of this HRI pays more dividend than 89.58% of the companies listed in the same industry.
HRI's Dividend Yield is comparable with the S&P500 average which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.38% |
5.2 History
HRI has been paying a dividend for over 5 years, so it has already some track record.
The dividend of HRI decreased in the last 3 years.
Dividend Growth(5Y)N/A
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
HRI pays out 36.49% of its income as dividend. This is a sustainable payout ratio.
DP36.49%
EPS Next 2Y9.39%
EPS Next 3Y12.12%
111.5
-6.16 (-5.24%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners98.64%
Inst Owner Change-0.36%
Ins Owners1.19%
Ins Owner Change-5.99%
Market Cap3.18B
Analysts75.71
Price Target210.12 (88.45%)
Short Float %5.48%
Short Ratio3.14
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.38% |
Yearly Dividend2.72
Dividend Growth(5Y)N/A
DP36.49%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-6.95%
Min EPS beat(2)-10.11%
Max EPS beat(2)-3.79%
EPS beat(4)1
Avg EPS beat(4)-4.18%
Min EPS beat(4)-11.54%
Max EPS beat(4)8.72%
EPS beat(8)2
Avg EPS beat(8)-4.38%
EPS beat(12)2
Avg EPS beat(12)-4.3%
EPS beat(16)5
Avg EPS beat(16)18.9%
Revenue beat(2)2
Avg Revenue beat(2)2.23%
Min Revenue beat(2)1.87%
Max Revenue beat(2)2.59%
Revenue beat(4)4
Avg Revenue beat(4)1.76%
Min Revenue beat(4)0.91%
Max Revenue beat(4)2.59%
Revenue beat(8)5
Avg Revenue beat(8)0.05%
Revenue beat(12)9
Avg Revenue beat(12)0.39%
Revenue beat(16)11
Avg Revenue beat(16)0.83%
PT rev (1m)-7.33%
PT rev (3m)-15.23%
EPS NQ rev (1m)2.81%
EPS NQ rev (3m)-7.06%
EPS NY rev (1m)-0.84%
EPS NY rev (3m)-12.86%
Revenue NQ rev (1m)0.2%
Revenue NQ rev (3m)0.93%
Revenue NY rev (1m)-0.05%
Revenue NY rev (3m)-2.96%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.65 | ||
| Fwd PE | 8.47 | ||
| P/S | 0.89 | ||
| P/FCF | 198.47 | ||
| P/OCF | 2.59 | ||
| P/B | 2.27 | ||
| P/tB | 20.62 | ||
| EV/EBITDA | 4.82 |
EPS(TTM)12.89
EY11.56%
EPS(NY)13.16
Fwd EY11.81%
FCF(TTM)0.56
FCFY0.5%
OCF(TTM)43.01
OCFY38.58%
SpS125.28
BVpS49.02
TBVpS5.41
PEG (NY)4.06
PEG (5Y)0.18
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.68% | ||
| ROE | 15.11% | ||
| ROCE | 10.16% | ||
| ROIC | 7.62% | ||
| ROICexc | 7.71% | ||
| ROICexgc | 9.31% | ||
| OM | 20.82% | ||
| PM (TTM) | 5.91% | ||
| GM | 61.29% | ||
| FCFM | 0.45% |
ROA(3y)4.38%
ROA(5y)4.04%
ROE(3y)24.04%
ROE(5y)21%
ROIC(3y)7.69%
ROIC(5y)7%
ROICexc(3y)7.77%
ROICexc(5y)7.07%
ROICexgc(3y)9.25%
ROICexgc(5y)8.36%
ROCE(3y)10.24%
ROCE(5y)9.32%
ROICexcg growth 3Y2.77%
ROICexcg growth 5Y9.04%
ROICexc growth 3Y2.21%
ROICexc growth 5Y7.51%
OM growth 3Y4.56%
OM growth 5Y10.96%
PM growth 3Y-18.21%
PM growth 5Y20%
GM growth 3Y1.25%
GM growth 5Y3.11%
F-Score5
Asset Turnover0.45
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.99 | ||
| Debt/FCF | 261.94 | ||
| Debt/EBITDA | 2.69 | ||
| Cap/Depr | 150% | ||
| Cap/Sales | 33.88% | ||
| Interest Coverage | 2.88 | ||
| Cash Conversion | 79.08% | ||
| Profit Quality | 7.58% | ||
| Current Ratio | 1.38 | ||
| Quick Ratio | 1.38 | ||
| Altman-Z | 1.22 |
F-Score5
WACC9.37%
ROIC/WACC0.81
Cap/Depr(3y)182.39%
Cap/Depr(5y)152.23%
Cap/Sales(3y)41.77%
Cap/Sales(5y)35.58%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)4.97%
EPS 3Y19.73%
EPS 5Y48.42%
EPS Q2Q%10.49%
EPS Next Y2.13%
EPS Next 2Y9.39%
EPS Next 3Y12.12%
EPS Next 5Y10.33%
Revenue 1Y (TTM)8.71%
Revenue growth 3Y19.84%
Revenue growth 5Y12.29%
Sales Q2Q%14.44%
Revenue Next Year3.93%
Revenue Next 2Y4.87%
Revenue Next 3Y5.59%
Revenue Next 5Y5.29%
EBIT growth 1Y12.07%
EBIT growth 3Y25.3%
EBIT growth 5Y24.59%
EBIT Next Year115.96%
EBIT Next 3Y35.64%
EBIT Next 5Y25.96%
FCF growth 1Y104.1%
FCF growth 3Y-46.1%
FCF growth 5YN/A
OCF growth 1Y12.8%
OCF growth 3Y18.08%
OCF growth 5Y14.02%