Hertz (HTZ): The Turnaround Nobody Believes, But I’m Pounding the Table Anyway
Sometimes doing the wrong thing ends up being right – at least that’s the sarcastic lesson from Hertz Global Holdings (HTZ) these days. After a disastrous fling with electric vehicles (EVs) that blew a tire in 2024, the rental car icon has quietly swapped Teslas for Toyotas and charging stations for gas pumps. And guess what? Business is finally starting to not suck. In fact, I’m pounding the table on this high-risk, high-reward turnaround play. Sure, Hertz still looks like a financial trainwreck on paper (hello, $2.9 billion loss last year), but hear me out – this beaten-down stock could rocket from the ~$5 range to $8–15 if the upcoming Q3 results confirm the nascent comeback. Buckle up, because we’re taking a joyride through Hertz’s gas-guzzling renaissance and the speculative technicals that make this a potential short-squeeze rocketship.
From Tesla Fantasy to Internal-Combustion Reality
A few years ago, Hertz went all-in on the EV hype – and ended up going all-out just as fast. In 2021, the company splurged $4.2 billion on 100,000 Tesla Model 3s, bragging about an electric future. Fast forward to 2023-2024, and that EV dream turned into a nightmare of steep depreciation, charger anxiety, and customers begging for gas cars. Hertz quickly discovered that renting EVs to hurried travelers wasn’t exactly a goldmine – who could have predicted that folks on vacation don’t want to plan charging stops? The result: EVs depreciated like bananas, repair costs went through the roof, and utilization stunk. By late 2023, Hertz cried uncle and unloaded most of the 30,000 EVs in its fleet. The company took a $245 million write-down in Q4 2023 just to dump those electric albatrosses.
In a delicious bit of irony, Hertz’s salvation came from embracing the old-school: selling off EVs and refocusing on traditional internal combustion engine (ICE) cars that customers actually want. The pivot was drastic but necessary. Hertz reinvested the EV sale proceeds into new ICE vehicles to meet demand, and by mid-2025 the transformation back to an ICE-dominated fleet was essentially complete. “Lower-margin” EV rentals are out; gas-powered SUVs and sedans are in. The broader rental car industry learned a hard lesson from Hertz’s folly – don’t force EVs on customers if they don’t want them. Hertz now touts that nearly 80% of its core U.S. fleet is less than a year old – shiny new Camrys and Corollas replacing those Teslas that spent more time charging than on the road.
And guess what happened when Hertz returned to basics? Costs plummeted. Depreciation per vehicle – the company’s biggest expense – collapsed from the “staggering” ~$537 per month in 2024 (during the Tesla fiasco) to just $251 last quarter. That’s a 58% year-over-year improvement in fleet depreciation, an insane turnaround that beat Hertz’s own target (they were aiming for under $300 and came in way lower). In plain English: by dumping EVs and buying the right cars at the right price, Hertz isn’t losing as much value on each vehicle. It’s literally the difference between hemorrhaging money and starting to turn a profit. No surprise, Hertz actually squeaked out a positive adjusted EBITDA in Q2 2025 – its first in nearly two years.Management finally seems to have a clue: Buy Right, Hold Right, Sell Right is their new mantra, and it’s working They’re aligning fleet size to demand, keeping utilization high (83% in Q2, up 300 bps), and even selling cars directly to consumers (more on that in a second).
Let’s pause to appreciate the spectacle here. Hertz basically did a full 180 back to gasoline while the rest of the world was preaching EV utopia. They got burned badly for jumping on the EV bandwagon too soon – and now they might rise from the ashes precisely because they ditched that trend at its peak of hype. Customers weren’t ready, the charging infrastructure wasn’t ready, and Hertz’s balance sheet definitely wasn’t ready. By giving the people what they want – a Chevy Malibu over a Model 3 – Hertz is filling its lots and improving margins. Q3 2025 is poised to mark the bottom of Hertz’s cycle, as the company laps the worst of the EV-related losses and starts growing profit metrics again. In fact, analysts suspect this Q3 could be the first quarter with positive net income since 2023. If that happens, it’s game on.
Amazon Joins the Party (Used Cars = Hidden Gold)
Remember how Hertz is selling cars directly now? This is another underappreciated part of the turnaround. To squeeze every drop of value from its fleet, Hertz launched Hertz Car Sales on Amazon in August 2025 – yes, Amazon. Now ANYBODY can go on Amazon’s auto portal and buy a former Hertz rental with a few clicks, complete with financing and pickup at a Hertz location. Why is this a big deal? It allows Hertz to sell de-fleeted cars at retail prices instead of dumping them at auction for wholesale. Cutting out the middleman (dealers) means Hertz pockets more cash per car. According to analysis of the partnership, a car Hertz might have sold for $25,000 at auction (netting maybe $1,500 profit) could fetch the same $25,000 from an Amazon customer but yield $3,000 in profit even after Amazon’s cut Multiply that across thousands of cars, and you’re talking serious margin improvement.
This Amazon tie-up essentially supercharges the “Sell Right” part of Hertz’s strategy. By moving cars faster and at better prices, Hertz can boost its residual values, which in turn further lowers depreciation expense.. Early indications suggest this could boost Hertz’s retail profit margins by ~30% through premium pricing and volume. The Amazon effect has the potential to crush the depreciation per vehicle – they’re simply not taking as big a loss on each car because they’re selling smarter.
Technical Tension: Coiled Spring or Just Broke?
Alright, so fundamentally the worst looks over – but what about the stock itself? At around $5 and change, HTZ has basically been left for dead by “serious” investors. It’s volatile, heavily shorted, and still down ~30% from 3 months ago thanks to that summer swoon in rental car stocks. Yet here’s where things get interesting for us degenerate speculators: the technical setup and trading dynamics on HTZ scream “coiled spring.” The relative strength index (RSI) on the stock recently crawled out of oversold territory (<30) and is hovering in the neutral 38–45 range now. Translation: the bleeding stopped, momentum is stabilizing, and there’s room to the upside before anyone cries “overbought.” The MACD (moving average convergence divergence) indicator – a fancy way to gauge trend shifts – is still slightly below zero (around-0.1), but it’s inching up, hinting that the downtrend is losing steam. One little spark (like a bullish earnings surprise) could be enough to flip these indicators into buy mode
The Powder Keg: (The Short Squeeze)
Short interest. To put it bluntly, the shorts went too far and could get their asses handed to them! That’s exactly why it could explode upward. As of the end of September, over 55 million HTZ shares were sold short, which is roughly 43–44% of the public float. Yes, nearly half of all the tradeable shares are shorted by cynics betting Hertz will fail. That is an astronomically high short percentage – “potential short squeeze” written in red letters 10 feet tall. These shorts have been piling in for months; short interest barely budged even after Ackman announced his stake. And they’re not just sitting on their hands: on a typical day recently, over 70% of the off-exchange trading volume in HTZ has been short sales (likely happening in dark pools where big players operate out of sight). This tsunami of shorting activity tells you two things: (1) the bear thesis is crowded and arguably maxed out, and (2) if the tide turns, the unwind will be spectacular.
How could that happen? Simple: Hertz just needs to not implode. The Q3 earnings report (due Nov 4) is the make-or-break moment. If Hertz shows improving results – say, profit metrics improving, upbeat guidance, or even just no new horror stories – it could trigger a rush for the exits by shorts. With ~5.9 days of average volume needed for shorts to cover their positions, a sudden surge in buy orders could send HTZ rocketing in a feedback loop (classic short squeeze dynamics). I’m talking the stock ripping 50–100% in a blink if the stars align. Is this guaranteed? Of course not – Hertz could just as easily stumble and give shorts more ammo. But the risk/reward setup is decidedly asymmetrical here. Everyone and their mother is already bearish; That’s exactly the scenario where an ugly duckling stock can surprise to the upside.
High Risk, High Reward: Ackman’s Edge and the Path to $10+
Let’s be clear: HTZ is not a widows-and-orphans stock. It’s a high-risk gamble that could as easily flop 50% as double. The company is still digging out of a financial hole, with revenue growth anemic (down ~7% year-over-year in Q2) and a heap of debt to manage. This is speculation, pure and simple – and I love it. Why? Because the pieces are in place for a spectacular comeback story if management delivers even modestly. We have a leaner, refocused operation (finally doing what works instead of trendy experiments), a cost structure that’s been slashed, and a big macro tailwind: used car prices have stayed remarkably strong through Q3. (In fact, wholesale used vehicle values in September 2025 were higher than normal seasonal trends, up about 2% year-on-year – a boon for Hertz’s resale values and depreciation costs).
The Heavy Weight Hedge Fund Manager is IN
That’s Bill Ackman, the billionaire investor and extremely respected who has taken a personal interest in Hertz’s fate. Ackman’s Pershing Square Capital plowed roughly $425 million into Hertz this year, amassing nearly a 20% stake.. Ackman sees what others missed: a classic turnaround + deep value scenario. He’s explicitly said that things like auto tariffs could raise used car prices and thereby increase Hertz’s fleet value by billions. (For example, a mere 10% bump in used car prices would boost the value of Hertz’s fleet by about $1.2 billion, roughly half the company’s market cap – talk about an embedded asset play!). And let’s be honest: having a heavyweight like him on board is a huge plus He’s got a team of analysts crawling all over the numbers, likely an informational edge from industry contacts, and maybe even a direct line to management. If he’s willing to bet the price of a private island on Hertz, that should tell you something.
I’m not saying “Ackman bought, so you should too” – but it certainly adds credibility to the bull case that a famed activist sees value where others see junk. It also adds pressure on Hertz’s C-suite to not screw this up (you don’t want to make Bill mad). The risk of ruin is mitigated by the fact that Hertz isn’t going bankrupt or anything – it has over $1.4B liquidity and is operationally much healthier now. The risk is more that the stock languishes if growth stays meh. But with so much negativity priced in, any whiff of improvement can be explosive.
TL:DR
Hertz has executed a gutsy, unorthodox turnaround by ditching its EV pipe dream and returning to what works. The fundamentals are inflecting upward (lower costs, stabilizing demand, strong used-car environment), and the stock’s technical setup is a powder keg of pent-up pessimism. This is not a play for the faint of heart – it’s a speculative, high-octane bet. But for those of us with a taste for contrarian rockets, HTZ offers a very tasty proposition. I’m long, loud, and optimistic – and if I’m right, this could be one of those “I told you so” moments as the stock blasts off and turns skeptics into roadkill. As always, do your own due diligence (and maybe say a prayer to the trading gods), but I’m buckling in for what could be a big hit on a wildly speculative stock. See you on the other side – hopefully in first class, courtesy of a Hertz-fueled gain.
The shorts are boxed in. Ackman is lurking. And I’m pounding the table.
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