Hertz Global Holdings Inc. announced on Wednesday that its earnings outlook for the second quarter is at the lower end of its anticipated range, citing weaker-than-expected demand for used cars. The car rental company projected adjusted corporate earnings before interest, taxes, depreciation, and amortization (EBITDA) between $50 million and $80 million for the period, falling within but near the bottom of its prior forecast.

Following the announcement, Hertz’s shares plunged 41%, closing at $2.99 in Wednesday trading. The sharp decline reflects investor concerns over the company’s profit margins amid a more challenging used-car market.

Hertz also revealed that net depreciation per unit per month, an indicator of the average monthly loss in value of rental vehicles, is expected to reach approximately $300 in the second quarter. This figure marks a notable increase from earlier projections made by company executives in May, who had anticipated depreciation per vehicle to be well below $300. The initial forecast had been based on expectations of favorable resale values during the quarter, but the actual market conditions resulted in higher-than-expected losses on used cars.

The shift in depreciation costs underscores the difficulties Hertz faces in managing fleet values in a volatile used-vehicle market, which plays a critical role in the company’s overall profitability. While the adjusted EBITDA outlook remains within the company’s guidance range, the disappointing outlook and stock price reaction highlight investor wariness about Hertz’s near-term financial performance amid changing market dynamics.