Hertz shares tumble as used-car weakness dents Q2 outlook

Hertz Global Holdings shares plunged more than 38% after the company warned second-quarter adjusted corporate EBITDA is tracking to the low end of its $50 million to $80 million guidance range, citing weakness in the used-car market and higher losses on vehicle sales.

The stock drop occurred during Wednesday trading and represented the largest single-day percentage decline in the company’s history, with the closing price at its lowest level since March 2025. Year to date, the shares have fallen about 28% and are down nearly 50% over the past 12 months.

In a securities filing, Hertz said it expects second-quarter adjusted corporate EBITDA between $50 million and $80 million and that results are likely to land near the lower end of that range. Analysts had modeled average second-quarter EBITDA of roughly $79.11 million, which would put Hertz below consensus if the low-end outcome materializes.

Hertz attributed the weaker outlook to softer-than-expected conditions in the used-car market. The company reported that deterioration in resale values increased depreciation costs and produced losses on vehicle dispositions in May after gains in April. Management now expects net depreciation per vehicle per month to be about $300 for the quarter, higher than the level forecast last month.

Operational metrics largely met or slightly exceeded prior expectations. Fleet size, total revenue, rental days and revenue per day were supported by steady rental demand and stronger-than-anticipated capacity utilization, but the losses on used-vehicle sales more than offset those gains.

Alongside the earnings update, Hertz disclosed plans for a $100 million registered public offering of common stock and a $300 million offering of exchangeable senior first-lien payment-in-kind notes due 2030. Proceeds from the note offering are intended for general corporate purposes, which could include repayment of outstanding debt.

Under the arrangement with the underwriter, Hertz will lend newly issued shares to allow investors to establish short positions to hedge purchases of the notes; the company will receive a nominal lending fee and no direct proceeds from the share lending. The exchangeable notes will pay interest in a mix of cash and payment-in-kind and may be exchanged for cash, Hertz common stock, or a combination at the company’s election. The number of shares issuable on exchange is capped at 19.9% of outstanding shares unless shareholders approve a larger issuance.

The company noted the broader used-car market faces pressure. Higher tariffs on new vehicles have pushed some buyers toward pre-owned cars, while macroeconomic strains and tighter household budgets have reduced margins for used-vehicle sellers and increased volatility in resale values, translating into higher depreciation costs for rental fleets.

Over the past year Hertz has cut costs, refreshed its fleet and pursued partnerships, including agreements announced in April with Uber to support the ride-hailing firm’s robotaxi efforts. Despite those actions, the recent depreciation-driven losses on vehicle sales and the planned capital raises coincided with the sharp market selloff.