Hertz Global Holdings Inc (HTZ, Financial) saw its stock surge by 23.62% today following the U.S. government's decision to impose a 25% tariff on all imported vehicles. This move is anticipated to drive up the cost of new vehicles, potentially benefitting car rental companies like Hertz.
The stock is currently priced at $4.27, highlighting significant interest from investors. However, despite the recent price movement, HTZ has a number of warning signs. It carries a GF Value designation of "Possible Value Trap, Think Twice" which may indicate potential risks, given its weak financial health and severe financial warning signs. The company displays poor financial strength, evidenced by its high debt levels, and it has been consistently issuing new debt over the last three years.
Hertz's Price-to-Book (PB) ratio stands at 8.53, which is close to its five-year high, suggesting that the stock might be overvalued in terms of its book value. The Altman Z-Score of -0.1 places Hertz in the distress zone, indicating a potential bankruptcy risk if current trends continue. Moreover, the company's Piotroski F-Score is low at 3, typically pointing to poor operational efficiency.
On a brighter note, the company's Beneish M-Score suggests that Hertz is unlikely to be engaging in earning manipulation. Yet, its operating income has shown a loss at least once in the past three years, and the revenue per share has been declining over the last five years.
Investors considering Hertz (HTZ, Financial) should weigh the potential benefits from the tariff impact against the company's underlying financial challenges, as indicated by its severe warning signs and poor historical performance metrics.
