What Happened?
Shares of equipment rental company Herc Holdings (NYSE: HRI) fell 4.7% in the afternoon session after a key competitor, Ashtead, reported mixed first-quarter results that signaled potential industry-wide pressures.
Ashtead, the owner of Sunbelt Rentals, announced that while its group revenues increased by two percent to $2.75 billion, its pre-tax profit declined by six percent to $511 million. The company attributed the drop in profitability to higher staff and operating costs, as well as increased depreciation. This news from a major industry player has likely raised concerns among investors about similar margin pressures potentially impacting Herc's financial performance, leading to a sell-off in its shares.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Herc? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Herc’s shares are extremely volatile and have had 38 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 13 days ago when the stock dropped 3.1% on the news that markets continued to decline, as investors grew cautious ahead of a key speech by Federal Reserve Chair Jerome Powell. The move came as U.S. equity markets recorded a fifth consecutive day of losses for major indexes like the S&P 500, with technology stocks experiencing the largest declines.
Herc is down 32.2% since the beginning of the year, and at $126.11 per share, it is trading 47.3% below its 52-week high of $239.28 from November 2024. Investors who bought $1,000 worth of Herc’s shares 5 years ago would now be looking at an investment worth $3,050.
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