Shareholders will be ecstatic, with their stake up 21% over the past week following Herc Holdings Inc.'s (NYSE:HRI) latest quarterly results. It was a pretty mixed result, with revenues beating expectations to hit US$965m. Statutory earnings fell 4.2% short of analyst forecasts, reaching US$4.28 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from Herc Holdings' eight analysts is for revenues of US$3.76b in 2025. This reflects a solid 9.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 20% to US$14.64. Before this earnings report, the analysts had been forecasting revenues of US$3.69b and earnings per share (EPS) of US$14.42 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 18% to US$229. It looks as though they previously had some doubts over whether the business would live up to their expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Herc Holdings, with the most bullish analyst valuing it at US$307 and the most bearish at US$150 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Herc Holdings' revenue growth is expected to slow, with the forecast 7.2% annualised growth rate until the end of 2025 being well below the historical 15% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.4% per year. Even after the forecast slowdown in growth, it seems obvious that Herc Holdings is also expected to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Herc Holdings going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 2 warning signs for Herc Holdings (of which 1 is significant!) you should know about.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
