Herc HoldingsHRI +6.82%86 Gross Margin % is 28.62% as of Mar. 2026, which is 8% below its 10-year median of 31.07. GuruFocus rates HRI with a GF Score™ of 86/100 and a GF Value™ of $168.69 (Fairly Valued). The stock has 9 warning signs investors should review. Among 1,007 Business Services companies, Herc Holdings ranks worse than 54.72% on this metric.
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Herc Holdings had a gross margin of 28.62% for the quarter that ended in Mar. 2026 => Competition eroding margins
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Herc Holdings Gross Margin % Related Terms
Herc Holdings Gross Margin % Historical Data
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The historical data trend for Herc Holdings's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Rental & Leasing Services subindustry, Herc Holdings's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Herc Holdings Gross Margin % vs Business Services Industry
For the Business Services industry and Industrials sector, Herc Holdings's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Herc Holdings's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Herc Holdings (HRI) has a Gross Margin % of 28.62% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Herc Holdings and its competitors. This is near median its historical median of 31.07. Over the past decade, Herc Holdings' Gross Margin % has ranged from 22.60 to 38.87. According to the industry distribution chart, Herc Holdings ranks #551 out of 1007 companies in the Business Services industry, placing it in the top 54.7%.
Is Herc Holdings' Gross Margin % too high?
Herc Holdings' current Gross Margin % of 28.62% is near median its 10-year median of 31.07. Over the past 10 years, this metric has ranged from a low of 22.60 to a high of 38.87. The Business Services industry median Gross Margin % is 34.46. Herc Holdings' value of 28.62% is 16.9% below this industry median. Based on the distribution chart, Herc Holdings ranks #551 out of 1007 companies in the Business Services industry, which is below the industry midpoint. Overall, Herc Holdings has a GF Score™ of 86/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Herc Holdings' Gross Margin % compare to WSC and EQPT?
According to the Business Services industry distribution chart, Herc Holdings ranks #551 out of 1007 companies for Gross Margin %. This places Herc Holdings in the lower half of its industry. The industry median Gross Margin % is 34.46. Herc Holdings' value of 28.62% is 16.9% below this benchmark. Historically, Herc Holdings' own Gross Margin % has ranged from 22.60 to 38.87 over the past decade. While the company's 10-year median is 31.07 vs. the industry median of 34.46, Herc Holdings has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Business Services company?
The median Gross Margin % among Business Services companies is 34.46, based on 1,007 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Herc Holdings's current Gross Margin % of 28.62% is 16.9% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Herc Holdings and its competitors. For the Business Services industry, the median Gross Margin % is 34.46 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Herc Holdings's current Gross Margin % is 28.62%, which is near median its own 10-year median of 31.07. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Herc Holdings stock overvalued right now?
Based on GuruFocus' analysis, Herc Holdings (HRI) is currently considered Fairly Valued. The stock's GF Value™ is $168.69, compared to a current price of $153.00 — trading 9.3% below its estimated fair value. The current Gross Margin % is 28.62%, which is near median its 10-year median of 31.07 and 16.9% below the Business Services industry median of 34.46. Herc Holdings' overall GF Score™ is 86/100 with 9 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Herc Holdings (HRI), the current Gross Margin % is 28.62% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Herc Holdings (HRI) Overvalued in 2026?
Based on GuruFocus' analysis, Herc Holdings stock appears to be undervalued.
The current stock price of $153.00 is trading 9.3% below its estimated GF Value™ of $168.69.
GuruFocus considers Herc Holdings to be Fairly Valued.
Key valuation signals for HRI:
Gross Margin %: 28.62% (near median its 10-year median of 31.07)
GF Value™: $168.69 vs. price of $153.00 (9.3% below fair value)
Industry Position: 16.9% below the Business Services median (#551 of 1007)
No single metric tells the full story. See the HRI stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Herc Holdings is an equipment rental company that was spun out of Hertz Global in 2016. It is currently the third-largest player in North America, after United Rentals and Sunbelt Rentals, with an approximate 6% market share pro forma for its 2025 acquisition of H&E Equipment Services. It serves a similar mix of companies to its peers (industrial, commercial, and residential construction) from its 450 locations targeting the top 100 metropolitan markets in the US. Herc's rental fleet of approximately $7 billion is also similar in composition to its peer group in terms of equipment offered. The company is also pursuing diversification by bundling and increasing specialty solutions for its customer base. Herc's portfolio skews toward local customers versus national accounts (60%/40%).
86GF Score
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