What Happened?
Shares of global car rental company Hertz (NASDAQ: HTZ) fell 14.8% in the afternoon session after the stock continued to retreat as the company cut its second-quarter profit forecast and announced plans to raise capital through stock and note offerings.
The move extends a sharp drop from the previous session after Hertz lowered its second-quarter Adjusted Corporate EBITDA guidance to a range of $50 million to $80 million, well short of analyst estimates. The company cited “unexpected softness in the used car market” for the revision, which is increasing depreciation costs and causing losses on vehicle disposals. Alongside the weaker outlook, Hertz revealed plans to offer $100 million in stock and $300 million in notes. Such capital-raising efforts are often seen by investors as a sign that a company needs cash, adding to negative sentiment. Following the news, analysts at firms including J.P. Morgan reiterated their "Sell" ratings on the stock, pointing to the weaker operating performance.
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What Is The Market Telling Us
Hertz’s shares are extremely volatile and have had 54 moves greater than 5% over the last year. But moves this big are rare even for Hertz and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 27.6% on the news that the company reduced its second-quarter earnings forecast and announced plans to raise capital through stock and debt offerings.
Hertz lowered its second-quarter Adjusted Corporate EBITDA outlook to a range of $50 million to $80 million, citing unexpected weakness in the used car market. The company explained that softness in May turned vehicle sale gains from April into losses, increasing its depreciation costs. Compounding the negative outlook, Hertz also announced plans for two separate offerings: $300 million in exchangeable senior notes and $100 million in common stock. These capital-raising efforts, combined with the weaker earnings forecast, fueled investor concerns, leading to the significant sell-off.
Hertz is down 51.6% since the beginning of the year, and at $2.53 per share, it is trading 68.3% below its 52-week high of $7.97 from July 2025. Investors who bought $1,000 worth of Hertz’s shares 5 years ago would now be looking at only $93.55.
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