Hertz stock jump nearly 40% after returning to profitability

Hertz Global Holdings has reported its first quarterly profit in more than two years, marking a major turnaround for the rental car company as it benefits from cost controls, a newer vehicle fleet, and rising car sales.

Shares of Hertz surged more than 38.26% to $6.83 following the results, heading for their largest single-day percentage gain since April, according to Dow Jones Market Data.

Rival Avis Budget Group also rose 3.3% on the news.

The company posted net income of $184 million, or 42 cents per share, compared with a loss of $1.33 billion, or $4.34 per share, a year earlier.

On an adjusted basis, earnings came in at 12 cents a share, well above Wall Street expectations for breakeven, according to FactSet.

Revenue for the quarter fell nearly 4% year-over-year to $2.48 billion but still topped analysts’ estimates of $2.39 billion.

CEO Gil West attributed the strong quarter to improved operational efficiency and a disciplined approach to fleet management.

“We’ve transformed our fleet from a headwind to a competitive advantage,” West said, noting that the company’s average vehicle age is now under 12 months, its youngest in years.

Lower depreciation and higher utilization drive recovery

A key driver behind Hertz’s rebound was the sharp drop in vehicle depreciation costs.

Depreciation per unit per month, a measure of how much a rental car’s value declines, fell 49% to $273 during the quarter.

The reduction in depreciation expenses significantly boosted profitability, reflecting the benefits of a younger, more efficient fleet.

The company’s vehicle utilization rate, or the share of cars actively rented out, rose to 84%, up two percentage points from last year and marking the highest level since 2018.

“Being able to drive record utilization in that environment shows that even when headwinds get in the way, we’re able to deliver strong results,” West told investors.

Hertz ended the quarter with over $2.2 billion in liquidity, which management described as evidence of “disciplined balance sheet management.”

The company’s focus on maintaining a newer fleet not only reduces maintenance downtime but also provides a steady stream of vehicles for its growing used-car sales business.

Expanding beyond rentals through strategic partnerships

Hertz is increasingly positioning itself as more than a car rental company.

The firm has expanded into retail vehicle sales and digital commerce, forming key partnerships to reach new customers.

In August, Hertz announced a collaboration with Amazon to sell used cars through the Amazon Autos platform, launched in 2024.

Hertz also serves as Amazon’s first fleet customer.

West said the partnership is already delivering results, helping the company build what he called an “omnichannel experience” that connects its rental and retail operations.

Hertz is also partnering with Cox Automotive to strengthen its retail sales network.

The percentage of cars sold via retail channels, which are more profitable than wholesale auctions, has risen by 570 basis points in 2025 compared with the first nine months of 2024.

“For 50 years Hertz Car Sales existed as a valuable but under-leveraged business line and dormant brand,” West said. “We’ve been working to transform it from a simple fleet rotation mechanism into a profit accretive engine.”

With its focus on younger cars, retail sales, and partnerships, Hertz appears to have found a path back to profitability, and investors are taking notice.

The stock is now up 86% year-to-date.

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