Is Herc Holdings, Inc. overvalued or undervalued?

As of 5 August 2025, Herc Holdings, Inc. has moved from a very expensive to an attractive valuation grade. The company appears undervalued based on its current P/E ratio of 23, which is significantly lower than the peer average of approximately 30.96, and an EV to EBITDA ratio of 5.59, indicating a favorable valuation compared to peers like Mr. Cooper Group, Inc. with a P/E of 29.22 and Ryder System, Inc. with an EV to EBITDA of 5.17. Additionally, the company boasts a high dividend yield of 124.56%, which further supports its attractiveness.
Despite the attractive valuation, Herc Holdings has underperformed relative to the S&P 500 in the year-to-date and one-year periods, with returns of -32.26% and -15.34%, respectively, while the S&P 500 returned 12.22% and 17.14%. However, over the five-year horizon, the stock has delivered a remarkable return of 212.83%, outperforming the S&P 500's 96.61%, suggesting potential for recovery and growth moving forward.