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Yahoo
24-07-2025
- Business
- Yahoo
Herc Holdings Inc. (HRI): A Bull Case Theory
We came across a bullish thesis on Herc Holdings Inc. on by sag301. In this article, we will summarize the bulls' thesis on HRI. Herc Holdings Inc.'s share was trading at $136.65 as of July 18th. HRI's trailing and forward P/E were 30.50 and 10.58 respectively according to Yahoo Finance. A close-up of industrial machinery used for steel production, the sparks flying off the sides. Herc Holdings (HRI), the third-largest player in the North American equipment rental market, has strengthened its competitive position with the acquisition of H&E, expanding its network to 600 branches and securing a leading presence in most major rental markets. With a 6% market share and diversified exposure across non-residential, infrastructure, industrial, and commercial segments, HRI has evolved significantly since its spin-off from Hertz, adopting operational discipline similar to leaders Ashtead (AHT) and United Rentals (URI). Industry consolidation and improved pricing discipline, underpinned by tools like Rouse Analytics, have structurally improved returns and operational resilience. The big three players benefit from procurement advantages, superior fleet utilization, and the ability to meet the complex demands of large contractors, with customer relationships reinforced by reliability and service responsiveness. Rental penetration in the U.S. continues to rise, especially in specialty equipment, which offers higher margins, faster growth, and greater stickiness. HRI is positioned to benefit from sustained demand driven by U.S. mega projects and infrastructure spending, with national accounts already contributing nearly half of its revenue. The company's M&A strategy, focused on specialty assets, has been value accretive, with acquisitions typically devaluing to 3.5–4.5x EBITDA post-synergy. Despite having the narrowest moat of the top three, HRI trades at an attractive 8x FY26 earnings, offering mid-single-digit rental growth and margin expansion. Its diversified end markets, variable cost structure, and improved capital discipline provide resilience in downturns, while potential strategic interest from private equity or larger peers offers downside support. Synergies from the H&E deal, robust construction activity, and policy-driven infrastructure spending serve as near-term catalysts. Previously we covered a bullish thesis on Hertz Global Holdings, Inc. (HTZ) by Bill Ackman on X in May 2025, which highlighted an improving car rental industry structure, operational turnaround, and asset value upside. The stock has appreciated about 6.80% since, as the thesis began to play out. The thesis remains intact. sag301 shares a similar view on HRI, stressing its scale, structural tailwinds, and valuation. Herc Holdings Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held HRI at the end of the first quarter which was 32 in the previous quarter. While we acknowledge the potential of HRI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. Sign in to access your portfolio
Zawya
03-07-2025
- Automotive
- Zawya
Only 15 electric vehicle brands in China will survive by 2030, AlixPartners says
Only 15 out of the 129 brands that currently sell electric vehicles and plug-in hybrids in China will be financially viable by 2030, as intense competition forces consolidation and some to exit the market, consultancy AlixPartners said on Thursday. These 15 brands are projected to account for approximately 75% of China's EV and plug-in hybrid market by the end of the decade, each averaging annual sales of 1.02 million units, AlixPartners said, without specifying brand names. However, consolidation in China is expected to proceed more slowly than in other markets, said Stephen Dyer, head of AlixPartners' automotive practice in Asia, because local governments may continue supporting non-viable brands due to their importance to regional economies, employment and supply chains. China, the world's largest automotive market, is currently facing a price war and significant overcapacity, both of which are straining profitability. Aside from BYD and Li Auto, no other publicly listed Chinese EV makers have achieved full-year profitability. Chinese regulators have called for automakers to halt the price wars. However, Dyer said that the war would likely continue, but through "hidden" factors such as insurance subsidies and zero-interest financing rather than direct price cuts, he estimated. Capacity utilisation ratio at Chinese car plants has fallen to an average 50% in China last year, the lowest in a decade, pressuring profits, Dyer said. (Reporting by Qiaoyi Li, Zhang Yan and Brenda Goh, Editing by Louise Heavens)
Yahoo
03-07-2025
- Automotive
- Yahoo
Only 15 electric vehicle brands in China will survive by 2030, AlixPartners says
BEIJING (Reuters) -Only 15 out of the 129 brands that currently sell electric vehicles and plug-in hybrids in China will be financially viable by 2030, as intense competition forces consolidation and some to exit the market, consultancy AlixPartners said on Thursday. These 15 brands are projected to account for approximately 75% of China's EV and plug-in hybrid market by the end of the decade, each averaging annual sales of 1.02 million units, AlixPartners said, without specifying brand names. However, consolidation in China is expected to proceed more slowly than in other markets, said Stephen Dyer, head of AlixPartners' automotive practice in Asia, because local governments may continue supporting non-viable brands due to their importance to regional economies, employment and supply chains. China, the world's largest automotive market, is currently facing a price war and significant overcapacity, both of which are straining profitability. Aside from BYD and Li Auto, no other publicly listed Chinese EV makers have achieved full-year profitability. Chinese regulators have called for automakers to halt the price wars. However, Dyer said that the war would likely continue, but through "hidden" factors such as insurance subsidies and zero-interest financing rather than direct price cuts, he estimated. Capacity utilisation ratio at Chinese car plants has fallen to an average 50% in China last year, the lowest in a decade, pressuring profits, Dyer said. Sign in to access your portfolio
