Global car rental company Hertz (NASDAQ: HTZ) beat Wall Street’s revenue expectations in Q2 CY2026, with sales up 9.7% year on year to $2.40 billion. Its non-GAAP loss of $0.11 per share was 55% above analysts’ consensus estimates.

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Company Overview

Started with a dozen Model T Fords, Hertz (NASDAQ: HTZ) is a global car rental company providing vehicle rental services to leisure and business travelers.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Hertz grew its sales at a solid 9.5% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Hertz’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 2.2% over the last two years.

This quarter, Hertz reported year-on-year revenue growth of 9.7%, and its $2.40 billion of revenue exceeded Wall Street’s estimates by 4.9%.

Looking ahead, sell-side analysts expect revenue to grow 3.9% over the next 12 months. Although this projection suggests its newer products and services will catalyze better top-line performance, it is still below average for the sector.

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Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.

Hertz was profitable over the last five years but held back by its large cost base. Its average operating margin of 7.2% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

Looking at the trend in its profitability, Hertz’s operating margin decreased by 31.9 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Hertz’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.

Hertz’s full-year EPS turned negative over the last four years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, Hertz’s low margin of safety could leave its stock price susceptible to large downswings.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Hertz, its two-year annual EPS growth of 37% was higher than its four-year trend. Its improving earnings are an encouraging data point, but a caveat is that its EPS is still in the red.

In Q2, Hertz reported adjusted EPS of negative $0.11, up from negative $0.34 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data.

Key Takeaways from Hertz’s Q2 Results

It was good to see Hertz beat analysts’ EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 15.7% to $1.81 immediately following the results.

Hertz had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).