HERC HOLDINGS INC (HRI) Stock Fundamental Analysis
NYSE:HRI - New York Stock Exchange, Inc. - US42704L1044 - Common Stock - Currency: USD
Taking everything into account, HRI scores 5 out of 10 in our fundamental rating. HRI was compared to 49 industry peers in the Trading Companies & Distributors industry. There are concerns on the financial health of HRI while its profitability can be described as average. HRI has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year HRI was profitable.
HRI had a positive operating cash flow in the past year.
HRI had positive earnings in each of the past 5 years.
Each year in the past 5 years HRI had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 2.68%, HRI is doing worse than 64.58% of the companies in the same industry.
HRI has a Return On Equity of 15.11%. This is comparable to the rest of the industry: HRI outperforms 50.00% of its industry peers.
HRI has a Return On Invested Capital (7.62%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for HRI is below the industry average of 9.86%.
| 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 has a better Profit Margin (5.91%) than 62.50% of its industry peers.
HRI's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 20.82%, HRI is doing good in the industry, outperforming 79.17% of the companies in the same industry.
In the last couple of years the Operating Margin of HRI has grown nicely.
HRI has a Gross Margin of 61.29%. This is amongst the best in the industry. HRI outperforms 93.75% of its industry peers.
HRI's Gross Margin has improved in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), HRI is destroying value.
The number of shares outstanding for HRI has been increased compared to 1 year ago.
Compared to 5 years ago, HRI has less shares outstanding
Compared to 1 year ago, HRI has an improved debt to assets ratio.
2.2 Solvency
HRI has an Altman-Z score of 1.38. This is a bad value and indicates that HRI is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 1.38, HRI is not doing good in the industry: 72.92% of the companies in the same industry are doing better.
HRI has a debt to FCF ratio of 261.94. This is a negative value and a sign of low solvency as HRI would need 261.94 years to pay back of all of its debts.
HRI has a Debt to FCF ratio (261.94) which is in line with its industry peers.
A Debt/Equity ratio of 2.99 is on the high side and indicates that HRI has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 2.99, HRI is doing worse than 83.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.99 | ||
| Debt/FCF | 261.94 | ||
| Altman-Z | 1.38 |
ROIC/WACC0.74
WACC10.3%
2.3 Liquidity
A Current Ratio of 1.38 indicates that HRI should not have too much problems paying its short term obligations.
HRI has a worse Current ratio (1.38) than 75.00% of its industry peers.
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.
Looking at the Quick ratio, with a value of 1.38, HRI is in the better half of the industry, outperforming 60.42% 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%.
HRI shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 48.42% yearly.
HRI shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.71%.
Measured over the past years, HRI shows a quite strong growth in Revenue. The Revenue has been growing by 12.29% on average per year.
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.
The Revenue is expected to grow by 5.29% on average over the next years.
EPS Next Y3%
EPS Next 2Y10.36%
EPS Next 3Y12.53%
EPS Next 5Y10.33%
Revenue Next Year4.38%
Revenue Next 2Y5.29%
Revenue Next 3Y6.06%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 12.72, the valuation of HRI can be described as correct.
Based on the Price/Earnings ratio, HRI is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 29.63, HRI is valued rather cheaply.
The Price/Forward Earnings ratio is 12.35, which indicates a correct valuation of HRI.
HRI's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. HRI is cheaper than 77.08% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of HRI to the average of the S&P500 Index (22.68), we can say HRI is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.72 | ||
| Fwd PE | 12.35 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HRI is valued cheaper than 89.58% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of HRI is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 291.05 | ||
| EV/EBITDA | 5.93 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
HRI has a very decent profitability rating, which may justify a higher PE ratio.
HRI's earnings are expected to grow with 12.53% in the coming years. This may justify a more expensive valuation.
PEG (NY)4.24
PEG (5Y)0.26
EPS Next 2Y10.36%
EPS Next 3Y12.53%
5. Dividend
5.1 Amount
HRI has a Yearly Dividend Yield of 1.57%. Purely for dividend investing, there may be better candidates out there.
The stock price of HRI dropped by -26.44% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 1.87, HRI pays a bit more dividend than its industry peers.
HRI's Dividend Yield is slightly below the S&P500 average, which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.57% |
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
36.49% of the earnings are spent on dividend by HRI. This is a low number and sustainable payout ratio.
DP36.49%
EPS Next 2Y10.36%
EPS Next 3Y12.53%
163.97
-14.92 (-8.34%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners98.64%
Inst Owner Change-0.2%
Ins Owners1.19%
Ins Owner Change-7.47%
Market Cap4.66B
Analysts73.85
Price Target236.06 (43.97%)
Short Float %3.85%
Short Ratio3.59
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.57% |
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)0%
PT rev (3m)35%
EPS NQ rev (1m)-1.31%
EPS NQ rev (3m)-1.01%
EPS NY rev (1m)-0.48%
EPS NY rev (3m)0.38%
Revenue NQ rev (1m)-0.57%
Revenue NQ rev (3m)-0.55%
Revenue NY rev (1m)-0.11%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.72 | ||
| Fwd PE | 12.35 | ||
| P/S | 1.31 | ||
| P/FCF | 291.05 | ||
| P/OCF | 3.8 | ||
| P/B | 3.34 | ||
| P/tB | 30.24 | ||
| EV/EBITDA | 5.93 |
EPS(TTM)12.89
EY7.86%
EPS(NY)13.28
Fwd EY8.1%
FCF(TTM)0.56
FCFY0.34%
OCF(TTM)43.13
OCFY26.31%
SpS125.63
BVpS49.15
TBVpS5.42
PEG (NY)4.24
PEG (5Y)0.26
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 | 1.38 |
F-Score5
WACC10.3%
ROIC/WACC0.74
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 Y3%
EPS Next 2Y10.36%
EPS Next 3Y12.53%
EPS Next 5Y10.33%
Revenue 1Y (TTM)8.71%
Revenue growth 3Y19.84%
Revenue growth 5Y12.29%
Sales Q2Q%14.44%
Revenue Next Year4.38%
Revenue Next 2Y5.29%
Revenue Next 3Y6.06%
Revenue Next 5Y5.29%
EBIT growth 1Y12.07%
EBIT growth 3Y25.3%
EBIT growth 5Y24.59%
EBIT Next Year123.64%
EBIT Next 3Y34.63%
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%