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Shareholders might have noticed that Herc Holdings Inc. (NYSE:HRI) filed its first-quarter result this time last week. The early response was not positive, with shares down 9.4% to US$105 in the past week. Things were not great overall, with a surprise (statutory) loss of US$0.63 per share on revenues of US$861m, even though the analysts had been expecting a profit. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following last week's earnings report, Herc Holdings' nine analysts are forecasting 2025 revenues to be US$3.64b, approximately in line with the last 12 months. Per-share earnings are expected to shoot up 109% to US$9.41. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.66b and earnings per share (EPS) of US$12.78 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.
Check out our latest analysis for Herc Holdings
It might be a surprise to learn that the consensus price target fell 11% to US$180, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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. The most optimistic Herc Holdings analyst has a price target of US$285 per share, while the most pessimistic values it at US$100.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Herc Holdings' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 0.7% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.0% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Herc Holdings.