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what it is
Herc rents construction and industrial equipment to companies that need machines, tools, and jobsite support.
how it gets paid
Last year Herc made $862M in revenue. construction rentals was the main engine at $0.31B, or 36% of sales.
why it's growing
Revenue grew 45.6% last year. Revenue was the real story. $621M was up 140% from last year.
what just happened
Revenue hit $621M, but EPS still sank to -$0.75.
At a glance
B balance sheet — gets the job done, barely
45/100 earnings predictability — expect surprises
20.6x trailing p/e — priced about right
2.2% dividend yield — cash in your pocket every quarter
6.5% return on capital — nothing to write home about
xvary composite: 53/100 — below average
What they do
Herc rents construction and industrial equipment to companies that need machines, tools, and jobsite support.
You do not buy Herc for poetry. You buy it because 610+ locations make replacement gear easier to find than a good excuse. The $5.3B H&E deal nearly doubled its urban footprint, so you get more reach and a bigger integration bill.
How they make money
$862M
annual revenue · their business grew +45.6% last year
construction rentals
$0.31B
industrial rentals
$0.20B
climate control and power
$0.15B
material handling
$0.11B
specialty and other
$0.09B
The products that matter
rents construction and industrial equipment
Equipment Rental
$862M reported revenue
this is the whole business in the current dataset. if rental demand softens, there is nowhere else to hide.
100% of listed revenue
branch network expansion via acquisition
H&E integration
$5.3B transaction
this is not a product line, but it is the variable carrying the equity story. the $5.3B deal nearly doubled the footprint in key urban markets, and you need that bigger map to show up in earnings.
scale bet
used equipment sales and fleet cleanup
Used fleet disposition
record amount sold
management sold a record amount of older or redundant equipment to simplify the combined fleet. that helps integration, but lower auction pricing can drag margins while the cleanup happens.
margin swing factor
Key numbers
$187
18-mo target
You are looking at a $187 target versus a $156.87 stock price. That is a 19% gap, which is why the chart still has room.
20.6x
trailing p/e
P/E → price divided by earnings → 20.6x means the market is paying 20.6 dollars for each dollar of profit. That is not cheap for a rental name.
45.5%
operating margin
Operating margin → profit left after running the business → 45.5% means Herc keeps almost half of each sales dollar before interest and taxes. That is the line investors respect.
$8.2B
long-term debt
Debt → money owed → $8.2B is 61% of capital. That is a heavy load when the cycle turns.
Financial health
B
strength
- balance sheet grade B — adequate — nothing special
- risk rank 3 — safer than 50% of stocks
- price stability 20 / 100
- long-term debt $8.2B (61% of capital)
- net profit margin 8.9% — keeps 9 cents of every dollar in revenue
- return on equity 12% — $0.12 profit for every $1 investors have put in
B — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in HRI 3 years ago → it's now worth $13,070.
The index would have given you $13,920.
source: institutional data · total return
What just happened
missed estimates
Revenue hit $621M, but EPS still sank to -$0.75.
The top line jumped 140% vs. prior year, but the bottom line stayed red. That is what happens when growth and integration share the same truck yard.
$216M
revenue
$0.75
eps
45.5%
operating margin
the number that mattered
Revenue was the real story. $621M was up 140% from last year, but earnings still lost $0.75 a share.
-
herc holdings churned in another quarter of weak profitability.recall, the company is currently navigating a transformational period following the purchase of h&e equipment services (h&e), the largest acquistion in its history.
-
the $5.3 billion merger nearly doubled herc’s footprint in key urban markets.however, integrating thousands of employees and hundreds of branches is expensive, and the interest on the debt used to buy h&e is high.
-
this is primarily why, in the recent third quarter, revenues soared 35%, vs. prior year, to $1.3 billion, but share earnings were nearly cut in half, at $2.20.
-
moreover, herc has been optimizing its combined fleet by selling off a record number of older, or redundant, equipment.
-
and since it utilized auctions to do this, profit margins were weak.
source: company earnings report, 2026
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What could go wrong
the #1 risk is absorbing the $5.3B H&E acquisition without letting debt and margins run the story.
med
integration has to earn the debt load
Herc used a $5.3B acquisition to get much bigger while already carrying $8.2B in long-term debt. if branch overlap, fleet mix, and employee integration take longer than planned, the earnings bridge gets ugly fast.
the immediate pressure point is the $9.70 fy2026 EPS estimate. if that slips, the stock stops looking like a rebound story and starts looking like a balance-sheet story.
med
this is still a one-engine business
equipment rental is the whole operation in the current dataset. there is no second profit stream here to smooth a slowdown in construction or industrial demand.
that leaves essentially all revenue exposed — whether you anchor to the listed $862M base or the $5B forward view.
med
fleet disposals can clean up the business and dent margins
management sold a record amount of older or redundant equipment through auctions. that helps rationalize the combined fleet, but auctions are a blunt tool.
cash can improve while profitability looks worse. that is useful operationally and annoying for shareholders at the same time.
med
institutions are not giving management the benefit of the doubt
the stock has seen net institutional selling for 2 consecutive quarters, with 141 buyers versus 156 sellers in 3q2025.
that does not break the business, but it tells you bigger money wants proof first. in a cyclical stock with $8.2B of debt, sentiment can move before fundamentals do.
between $8.2B of long-term debt, a $5.3B deal to absorb, and a business tied almost entirely to rental demand, there is not much room for an integration miss.
source: institutional data · regulatory filings · risk analysis
Pay attention to
risk
integration margins
the stock can live with temporary noise. it cannot live with revenue growth and weaker EPS showing up together for too long.
metric
fy2026 EPS estimate
$9.70 is the number carrying the forward valuation case. cuts to that estimate matter more than small moves in revenue.
calendar
next earnings update
you need one clean quarter where scale, fleet actions, and profitability point in the same direction. right now the signals are mixed.
trend
institutional flow
2 straight quarters of net selling is manageable. a third would tell you skepticism is becoming a trend, not a pause.
Analyst rankings
short-term outlook
average
momentum score 3 — middle of the pack. in human-speak, analysts do not see a strong near-term edge here.
risk profile
average
stability score 3 — typical risk on paper, even if the debt load makes the story feel less typical.
chart momentum
bottom 5%
technical score 5 — the weakest chart rank. the tape has been bad, and bad charts usually need a real catalyst to turn.
earnings predictability
45 / 100
earnings predictability is weak. translation: if you own this, you should be ready for estimate revisions and uneven quarters.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 141 buyers vs. 156 sellers in 3q2025. total institutional holdings: 32.0M shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$104
$269
$157
current price
$187
target midpoint · +19% from current · 3-5yr high: $270 (+70% · 16% ann'l return)
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