HTZ - Hertz Is In Trouble And It Could Get Worse If Interest Rates Remain High
2024-04-29 09:17:10 ET
Summary
- Hertz is selling 30,000 EVs at a loss of $195 million.
- The current depreciation rate for non-Tesla vehicles is a very high 1.67% because used car prices keep dropping.
- Hertz is highly leveraged and borrowed even more in 1Q'24.
- Higher for longer interest rates will continue to negatively impact used car prices, which negatively impacts Hertz.
Hertz Global Holdings ( HTZ ) ( HTZWW ) is in financial trouble because of two very irrational decisions by management - massive stock repurchases and electric vehicle purchases. When you add in much higher interest rates over the last two years and lower used vehicle prices, you get a plunging HTZ stock price. Considering that Hertz filed for Ch.11 bankruptcy in 2020, one may have expected that management would become very prudent. Nope. Management took up seats at the roulette table. They recently left the casino and have not made any stock repurchases in 2024, are selling 30,000 of their EVs, and got rid of CEO Stephen Scherr. The problem is that the damage was already done. Can Hertz be saved? HTZ stock price is down approximately 77% since my 2021 sell recommendation article ....
Hertz Is In Trouble And It Could Get Worse If Interest Rates Remain High