Herc Holdings Inc. (NYSE:HRI) shareholders will doubtless be very grateful to see the share price up 55% in the last month. But that doesn't change the fact that the returns over the last three years have been disappointing. In that time, the share price dropped 56%. So it's good to see it climbing back up. After all, could be that the fall was overdone.
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During five years of share price growth, Herc Holdings moved from a loss to profitability. We would usually expect to see the share price rise as a result. So given the share price is down it's worth checking some other metrics too.
Revenue is actually up 9.6% over the three years, so the share price drop doesn't seem to hinge on revenue, either. It's probably worth investigating Herc Holdings further; while we may be missing something on this analysis, there might also be an opportunity.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. If you are thinking of buying or selling Herc Holdings stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
The last twelve months weren't great for Herc Holdings shares, which performed worse than the market, costing holders 55%. The market shed around 4.9%, no doubt weighing on the stock price. The three-year loss of 24% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. Although Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. It's always interesting to track share price performance over the longer term. But to understand Herc Holdings better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Herc Holdings you should be aware of, and 1 of them is a bit concerning.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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