Hertz Swings to a Profit and Beats Every Estimate — But Can a $700 Million Company Dig Out From Under $18.7 Billion in Debt?

Shares surged as Hertz delivered a quarter that silenced, at least temporarily, the loudest skeptics of its turnaround. Revenue totaled $2.4 billion, up 10% year over year, driven by the company's strongest second-quarter revenue per day on record, excluding the pandemic peak in 2022.

The adjusted loss narrowed to $0.11 per share, crushing the $0.24 loss Wall Street expected. The stock, which closed at $1.56 on Tuesday, has since rocketed past $2.50 — trading up roughly 28%.

Doing More With Less Fleet Is the Real Story. Revenue climbed 10% despite Hertz operating a 1% smaller fleet, confirming that pricing power and utilization — not just adding cars — are driving the improvement.

Revenue per day rose 9% to $61.98 and revenue per unit climbed 8% to $1,542. For shareholders, this is the kind of capital-light progress that actually improves cash economics per vehicle.

Profitability Is Real but Fragile. GAAP net income hit $64 million with diluted earnings of $0.05 per share — a dramatic reversal from a $294 million loss a year ago. But dig deeper: on an adjusted basis, Hertz still lost $47 million.

Recall-related vehicle sidelines — roughly 15,000 cars — cost an estimated $27 million in GAAP net income and $30 million in adjusted EBITDA, roughly triple the prior year's impact. The profit line is moving right, but one bad quarter of used-car prices or another recall surge could erase it.

The Balance Sheet Remains the Elephant in the Room. Hertz carries over $20 billion of long-term debt against negative equity , and its $18.7 billion debt load and active class-action lawsuits remain material concerns.

Jefferies recently slashed its price target to $2 from $6, keeping a Hold rating. Even after the post-earnings pop, Hertz's market capitalization sits at just $727 million — a fraction of what it owes.

Q3 Guidance Suggests the Best Quarter in Years. Management expects Q3 adjusted EBITDA between $275 million and $325 million, with positive earnings per share. If delivered, that would represent a step-change from the $81 million just reported and could validate the turnaround thesis. But with the stock still down sharply from its 52-week high of $8.18 , investors are betting that operational gains can outrun a capital structure built for a much larger company.