Hertz’s first quarter results fell short of Wall Street’s expectations, with revenue and adjusted earnings per share coming in below consensus. The market responded negatively, reflecting concerns about persistent demand pressures and execution risk around the company’s ongoing transformation. Management attributed the quarterly performance to a deliberate strategy of reducing fleet capacity and rotating into a younger, lower-cost fleet, as well as temporary disruptions from early vehicle deliveries to avoid tariffs. CEO Gil West described the timing of new vehicle intake as “suboptimal at the local market level, impacting utilization and pricing,” but maintained that these actions were necessary for long-term improvement.

Is now the time to buy HTZ? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Hertz’s Q1 Earnings Call

• Ian Zaffino (Oppenheimer) asked about local market overfleeting due to early vehicle deliveries and residual value trends in retail versus wholesale channels. CEO Gil West clarified that overfleeting was a temporary, market-level issue, and retail channels are achieving stronger residual values.
• John Babcock (Bank of America Merrill Lynch) inquired about fleet acquisition timing, tariff exposure, and the balance between cost cutting and customer experience. West and Chief Commercial Officer Sandeep Dube emphasized that most new vehicles were secured before tariffs and that technology is being used to improve both efficiency and service quality.
• Chris Woronka (Deutsche Bank) probed the strategy behind shrinking the fleet and shifting demand mix, as well as the potential for further per-unit depreciation improvements. West and Haralson confirmed that a tighter fleet and selective customer targeting aim to boost margins, with further depreciation gains possible but subject to market volatility.
• John Healy (Northcoast Research) asked about the composition of depreciation gains and rate environment pressures given reduced industry fleet sizes. CFO Haralson explained that most of the sub-$300 depreciation per unit is driven by the new fleet, with gains from vehicle sales supplementing results.
• Dan Levy (Barclays) questioned the path to EBITDA breakeven in the second quarter and the cadence for achieving “North Star” targets. Dube responded that ongoing mix improvements and utilization gains are expected, though rate recovery will depend on macro trends and seasonal demand stabilization.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will be monitoring (1) whether Hertz can sustain cost reductions and improve utilization rates as the fleet mix evolves, (2) the effectiveness of new revenue management systems and technology partnerships in driving margin expansion, and (3) how the company navigates macroeconomic headwinds—particularly in corporate and government segments. The pace of recovery in used car residual values and progress on deleveraging will also be important signposts.

Hertz currently trades at $7.02, in line with $6.97 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).

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