Hertz Global (NASDAQ:HTZ) shares recovered from early losses to rise nearly 4% higher today after the vehicle rental company’s fourth-quarter net loss per share of $1.36 came in wider than estimates by $0.31. However, revenue of $2.2 billion landed ahead of expectations by $50 million.
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While demand remains robust, the company faces challenges with its electric vehicle fleet. With a focus on profitability, HTZ is rapidly moving to lower its EV fleet in favor of internal combustion vehicles (ICE).
In Q4, higher volume in leisure, corporate, and rideshare channels helped the company increase its top line by 7%. However, depreciation per unit per month came in at $498 due to write-downs of EVs held for sale. Additionally, elevated interest rates resulted in fleet interest expense rising to $91 per unit per month from $55 in the year-ago period. At the same time, total revenue per unit per month declined by 7% to $1,381.
Recently, Hertz announced plans to replace 20,000 EVs with gas-powered vehicles. It has also paused plans to purchase nearly 65,000 EVs from Sweden’s Polestar Automotive (NASDAQ:PSNY).
Is HTZ Stock a Good Buy?
Overall, the Street has a Hold consensus rating on Hertz Global. Following a nearly 53% drop in the company’s share price over the past year, the average HTZ price target of $10.60 implies a 30.4% potential upside in the stock.
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