Would You Still Hold Herc Stock If It Fell Another 30%?
Herc (HRI) stock is down 9.9% in 21 trading days. The recent slide reflects concerns around missed revenue and integration costs from its H&E acquisition, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Herc stands today.
- Size: Herc is a $4.7 Bil company with $4.3 Bil in revenue currently trading at $141.63.
- Fundamentals: Last 12 month revenue growth of 28.3% and operating margin of 14.4%.
- Liquidity: Has Debt to Equity ratio of 2.05 and an extremely low Cash to Assets ratio
- Valuation: Herc stock is currently trading at P/E multiple of 4730.4 and P/EBIT multiple of 11.3
- Has returned (median) 44.4% within a year following sharp dips since 2010. See HRI Dip Buy Analysis.
These metrics point to a Moderate operational performance, alongside Low valuation – making the stock Risky. For details, see Buy or Sell HRI Stock
That brings us to the key consideration for investors worried about this fall: how resilient is HRI stock if markets turn south? This is where our downturn resilience framework comes in. Suppose HRI stock falls another 20-30% to $99 – can investors comfortably hold on? Turns out, the stock has fared much worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
2022 Inflation Shock
- HRI stock fell 55.9% from a high of $196.39 on 9 November 2021 to $86.52 on 23 June 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 22 October 2024
- Since then, the stock increased to a high of $239.28 on 6 November 2024 , and currently trades at $141.63
| HRI | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -55.9% | -25.4% |
| Time to Full Recovery | 852 days | 464 days |
2020 Covid Pandemic
- HRI stock fell 74.2% from a high of $49.34 on 2 January 2020 to $12.72 on 18 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 10 November 2020
| HRI | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -74.2% | -33.9% |
| Time to Full Recovery | 237 days | 148 days |
2018 Correction
- HRI stock fell 65.4% from a high of $71.47 on 9 March 2018 to $24.75 on 24 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 12 January 2021
| HRI | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -65.4% | -19.8% |
| Time to Full Recovery | 750 days | 120 days |
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