Hertz Global Holdings Inc. (NASDAQ:HTZ) stock surged more than 20% in Friday’s premarket session after closing up 29.49% in the previous session.

The rental-car company reported second-quarter results that beat Wall Street expectations, raised confidence in its turnaround and prompted CEO Gil West to argue that the stock’s current valuation is “tough to understand” despite improving fundamentals.

During the post-earnings Q&A, West pushed back against the market’s recent view of the company, saying Hertz’s current valuation is “tough to understand” and arguing that the stock does not reflect the company’s improving fundamentals.

West said Hertz’s market capitalization had fallen to roughly one-third of its level 90 days earlier despite stronger liquidity, improving operating performance and continued progress on its turnaround strategy.

Hertz Global Earnings Snapshot

Revenue increased 10% year over year to $2.4 billion, beating the analyst consensus estimate of $2.28 billion. The growth was driven by stronger pricing, even as the average fleet size declined 1%.

The company reported an adjusted loss of 11 cents per share, beating estimates for a loss of 24 cents and improving from the prior-year quarter.

Adjusted corporate EBITDA rose to $81 million, up $63 million from a year earlier and above the company’s guidance, helped by stronger-than-expected pricing in June. Adjusted EBITDA margin expanded 260 basis points year over year to 3.4%.

The company’s adjusted direct operating expense (DOE) per transaction day was $37.49, slightly above expectations due to revenue-related variable costs and sale-leaseback expenses. Excluding those items and recall impacts, DOE per transaction day improved about 2% from a year earlier.

Hertz ended the quarter with $984 million in liquidity after completing a $350 million exchangeable senior secured notes offering.

Key Metrics

Revenue per unit (RPU) rose 8% year over year to a record $1,542, exceeding the company’s long-term target.

Revenue per day (RPD) increased 9% from a year earlier, marking the strongest second-quarter performance on record and remaining up 9% even when excluding the pandemic-driven 2022 comparison.

Fleet utilization improved 80 basis points to 79% despite elevated vehicle recalls, reflecting better fleet management.

The RPD-to-DOE spread widened 17% year over year to about $24.36 per day, marking the third consecutive quarter of annual expansion.

U.S. airport rental RPD increased 12% year over year, driving the company’s second straight quarter of double-digit global revenue growth. Hertz said roughly 6 to 7 percentage points of the increase came from commercial initiatives, 2 to 3 percentage points from favorable industry pricing and less than 0.5 percentage point from the FIFA World Cup.

Recall volume increased 300% year over year in the second quarter, affecting an average of 15,000 vehicles per month. During the first half of 2026, recalls reduced EBITDA by more than $55 million.

Hertz Global Outlook

For the third quarter, Hertz expects adjusted corporate EBITDA of $275 million to $325 million, positive earnings per share, transaction-day growth of about 1% year over year and net depreciation per unit (DPU) of $285 to $295 per unit per month.

For full-year 2026, the company forecasts adjusted corporate EBITDA of $225 million to $275 million, net DPU of about $300 per unit per month, transaction-day growth of approximately 2% and year-end liquidity of $1 billion to $1.4 billion.

Hertz said its ORO Mobility business is expected to generate more than $600 million in revenue in 2026. The business currently operates on Uber’s platform in Atlanta, Los Angeles, San Francisco and Northern New Jersey.

Management expects more than $500 million of EBITDA improvement in 2026, following a $1.2 billion improvement in 2025. The company also projects nearly 2,000 basis points of EBITDA margin expansion over the two-year period, with additional gains expected in 2027.

Hertz reaffirmed its 2027 target of $1 billion in adjusted corporate EBITDA and said it expects to return to full-year GAAP profitability and generate positive free cash flow.

HTZ Price Action: Hertz Global Holdings shares were up 20.27% at $2.42 during premarket trading on Friday, according to Benzinga Pro data.

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