Bill Ackman’s bet on Hertz might be paying off as it posts first profit in two years

Shares of car rental company Hertz Global Holdings (HTZ) surged 36.2% on Tuesday and this time it wasn’t because of a meme-stock rally.

The company posted its first profit in more than two years on Tuesday, with its net income for the third quarter coming in at $184, or 42 cents a share. Its Earnings per share (EPS) of 12 cents beat analysts’ consensus by five cents.

The company posted a loss of 68 cents per share a year ago.

The latest numbers could prove that Bill Ackman was right to bet on the beleaguered company’s turnaround. Earlier this year, Pershing Square fund had purchased 12.71 million Hertz shares, worth roughly $46.5 million.

In a post on X in April, Ackman argued that used-car prices are likely to rise due to new import tariffs. Hertz, which locked in its 2025 fleet purchases earlier this year at “attractive terms,” could benefit by offloading some of its current vehicles and replacing them with newer models.

“Hertz owns a fleet of over 500,000 vehicles valued at approximately $12 billion,” Ackman said.

“A 10% increase in used car prices would equate to a $1.2 billion gain on its auto asset, equivalent to approximately half of the company’s current market capitalization.”

Out with the old, in with the new

And in fact, Hertz said that it had “strategically monetized its fleet” through selling its older models on the retail market, essentially following the same strategy Ackman had outlined.

The company said that its car sales have increased by 570 basis points in 2025 compared to the first nine months of 2024.

The company announced in August a deal to sell thousands of its used cars on Amazon Autos, becoming the first fleet dealer to sell its used vehicles on the Amazon platform.

Hertz then upgraded its fleet with newer model vehicles, which was a part of what it called its “Back-to-Basics” strategy.

“Throughout this transformation, we’re rebuilding our foundation while sharpening our skills and capabilities, creating a new platform for growth,” Hertz CEO Gil West said in a statement. “Our progress is meaningful, our heads are down, but our eyes are on the horizon as we build a company that can thrive across the full spectrum of mobility.”

West told the Wall Street Journal that the average age of its vehicles is now under 12 months. Having newer cars will reduce the declines in value on its balance sheet, while also lowering the service time of its fleet.

Hertz’s stock jumped 56% after Ackman disclosed Pershing’s accumulation of shares earlier this year, but the last time it saw that kind of sudden increase was during a meme-stock rally in 2020.

After Covid crushed the car rental market in 2020, Hertz was buried under $19 billion in debt and filed for bankruptcy. Within days of entering Chapter 11, the stock soared 825% on the back of a Reddit-driven surge before falling back down again.

But if the company keeps up its momentum, this latest rally could be sustainable.

Its stock is now up nearly 85% for the year.