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Autonation (AN)
NYSE:AN
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AutoNation
(NYSE:AN)63Neutral
Positive Factors
Revenue Growth
AutoNation reported revenue growth with a 7% increase year-over-year, surpassing market expectations.
Share Repurchase
The company repurchased 0.6 million shares of common stock, indicating confidence in its own value.
Negative Factors
Earnings Report
AN traded down ~5% after a miss with Q3 being messy due to CDK, stop-sales, AN Finance growth, and storms.
AutoNation (AN) vs. S&P 500 (SPY)
Market Cap
$6.71B
Dividend YieldN/A
Average Volume (3M)486.80K
Price to Earnings (P/E)10.1
Beta (1Y)1.07
Revenue Growth-0.68%
EPS Growth-25.24%
CountryUS
Employees25,100
SectorConsumer Cyclical
Sector Strength53
IndustryVehicles
Share Statistics
EPS (TTM)16.94
Shares Outstanding39,056,587
10 Day Avg. Volume433,476
30 Day Avg. Volume486,798
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.26
Price to Cash Flow (P/CF)11.40
P/FCF Ratio14.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$206.00Price Target Upside19.98% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
AutoNation Business Overview & Revenue Model
Company DescriptionAutoNation, Inc. engages in the provision of automotive products and services. It operates through the following segments: Domestic, Import, Premium Luxury, and Corporate & Other. The Domestic segment comprises retail automotive franchises that sell new vehicles manufactured by General Motors, Ford and Chrysler. The Import segment includes retail automotive franchises that sell new vehicles manufactured primarily by Toyota, Honda, and Nissan. The Premium Luxury segment consists of retail automotive franchises that sell new vehicles manufactured primarily by Mercedes-Benz, BMW, Audi, and Lexus. The Corporate & Other segment involves in the collision centres, auction operations and stand-alone used vehicle sales and service centres. The company was founded by Steven Richard Berrard and Harry Wayne Huizenga Sr. in 1991 and is headquartered in Fort Lauderdale, FL.
How the Company Makes MoneyAutoNation primarily makes money through the sale of new and used vehicles. The company's extensive dealership network allows it to sell a high volume of vehicles, generating significant revenue. Additionally, AutoNation earns money from its after-sales services, which include vehicle maintenance, repair, and parts sales. The company also derives income from its finance and insurance segment, where it offers vehicle financing options and insurance products to customers. These diverse revenue streams are further bolstered by strategic partnerships with automotive manufacturers and financial institutions, which enhance AutoNation's ability to provide comprehensive automotive solutions to its customers.
AutoNation Financial Statement Overview
Summary
AutoNation exhibits mixed financial performance. Strengths in operational efficiency and cash flow management are countered by challenges with revenue volatility and high financial leverage. The company's ability to maintain profitability and manage debt effectively will be crucial.Income Statement
AutoNation's revenue growth has been volatile, with a notable decline in 2023. The company managed to maintain healthy gross and EBIT margins in 2023, indicating operational efficiency despite the revenue drop. However, the net profit margin has shown a declining trend, suggesting increasing costs or financial leverage, which may pose a risk to profitability.65
Positive
Balance Sheet
The balance sheet reveals a substantial amount of debt, with a debt-to-equity ratio significantly above 3 in 2023, indicating high financial leverage. The equity ratio has been stable, showing some level of financial stability. However, the declining return on equity suggests that the company is struggling to generate returns from its equity base.52
Neutral
Cash Flow
AutoNation has demonstrated strong free cash flow generation, with a high operating cash flow to net income ratio, highlighting efficient cash conversion. The free cash flow has remained stable, which is a positive sign for liquidity and operational management. However, the free cash flow growth rate has been inconsistent, reflecting potential volatility in cash generation capabilities.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 26.77B | 26.95B | 26.98B | 25.84B | 20.39B | Gross Profit |
| 4.79B | 5.13B | 5.27B | 4.95B | 3.57B | EBIT |
| 1.31B | 1.65B | 2.02B | 1.90B | 1.08B | EBITDA |
| 1.60B | 1.87B | 2.17B | 2.09B | 842.70M | Net Income Common Stockholders |
| 692.20M | 1.02B | 1.38B | 1.37B | 381.60M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 59.80M | 60.80M | 72.60M | 60.40M | 569.60M | Total Assets |
| 13.00B | 11.98B | 10.06B | 8.94B | 9.89B | Total Debt |
| 8.65B | 8.03B | 6.42B | 4.95B | 5.19B | Net Debt |
| 8.59B | 7.97B | 6.35B | 4.89B | 4.62B | Total Liabilities |
| 10.54B | 9.77B | 8.01B | 6.57B | 6.65B | Stockholders Equity |
| 2.46B | 2.21B | 2.05B | 2.38B | 3.24B |
| Cash Flow | Free Cash Flow | |||
| 314.70M | 313.70M | 1.34B | 1.41B | 1.05B | Operating Cash Flow |
| 314.70M | 724.00M | 1.67B | 1.63B | 1.21B | Investing Cash Flow |
| 12.30M | -569.90M | -479.30M | -460.30M | -73.70M | Financing Cash Flow |
| -300.60M | -172.50M | -1.15B | -1.68B | -606.70M |
AutoNation Technical Analysis
Negative
171.69
Price Trends
181.56
Negative
174.93
Negative
172.44
Negative
Market Momentum
-1.98
Positive
31.60
Neutral
13.24
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AN, the sentiment is Negative. The current price of 171.69 is below the 20-day moving average (MA) of 187.34, below the 50-day MA of 181.56, and below the 200-day MA of 172.44, indicating a bearish trend. The MACD of -1.98 indicates Positive momentum. The RSI at 31.60 is Neutral, neither overbought nor oversold. The STOCH value of 13.24 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AN.
AutoNation Risk Analysis
AutoNation disclosed 17 risk factors in its most recent earnings report. AutoNation reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
AutoNation Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $10.93B | 11.92 | 17.64% | 2.65% | 3.14% | -11.22% | |
74 Outperform | $5.83B | 11.97 | 16.75% | 0.42% | 11.53% | -13.75% | |
73 Outperform | $8.36B | 10.75 | 12.05% | 0.64% | 16.75% | -18.09% | |
72 Outperform | $5.02B | 11.87 | 12.29% | ― | 16.11% | -24.72% | |
68 Neutral | $2.23B | 10.71 | 22.11% | 1.89% | -1.03% | 24.64% | |
63 Neutral | $6.71B | 10.13 | 28.17% | ― | -0.68% | -25.24% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% |
* Consumer Cyclical Sector Average
Performance Comparison
AN
AutoNation
171.69
26.51
18.26%
ABG
Asbury
260.55
54.13
26.22%
GPI
Group 1 Automotive
445.13
184.82
71.00%
LAD
Lithia Motors
316.94
24.73
8.46%
PAG
Penske Automotive Group
165.29
16.92
11.40%
SAH
Sonic Automotive
66.09
15.75
31.29%
AutoNation Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: -10.88% | Next Earnings Date: Apr 17, 2025
Earnings Call Sentiment Positive
The earnings call highlighted a robust performance with significant growth in new vehicle sales and AutoNation Finance, strong after-sales results, and strategic share repurchases. However, challenges included increased floor plan interest expenses and flat used vehicle sales due to supply constraints.Highlights
Strong New Vehicle Sales Growth
AutoNation achieved a 12% same-store new unit volume growth in Q4 2024, with domestic segment sales up 17%, import segment up 5%, and premium luxury segment up 12%.
Impressive Performance of AutoNation Finance
AutoNation Finance grew its originations threefold over 2023, building a portfolio over $1.1 billion with improved credit quality and a delinquency rate of less than 3%.
Record After-Sales Gross Profit
After-sales gross profit rose more than 5% year-over-year and achieved record gross profit for both Q4 and the full year, with a significant margin expansion of 110 basis points.
Significant Share Repurchases
AutoNation repurchased approximately $100 million of shares in Q4 2024, totaling $460 million for the year, representing a 7% reduction in shares.
Recognition by Fortune Magazine
AutoNation was recognized by Fortune as one of the world's most admired companies for the eighth consecutive year, ranking highest among automotive retailers.
Lowlights
Increased Floor Plan Interest Expense
The fourth-quarter floor plan interest expense was $55 million, up $9 million from a year ago due to recovering new vehicle inventory levels.
Challenges in Used Vehicle Supply
Used unit sales were flat year-over-year, with ongoing supply challenges particularly in mid and higher-priced tiers due to lower new vehicle production during COVID.
Decline in Adjusted Net Income
Adjusted net income for Q4 2024 was $199 million, down from $216 million in the prior year, despite a reduction in shares outstanding.
Company Guidance
During AutoNation's fourth-quarter 2024 earnings call, the company reported several key metrics highlighting its performance and strategic focus areas. Notably, same-store new unit volume grew by 12%, contributing to a 5% year-over-year increase in same-store gross profit and a 110 basis point improvement in gross margin. AutoNation Finance, launched in late 2022, expanded its loan originations threefold over 2023, achieving a portfolio size exceeding $1.1 billion with a delinquency rate of less than 3%. This growth supported a 40% increase in interest income. The company maintained a nonrecourse financing rate of 75% for its finance portfolio and expects further improvements. In terms of capital allocation, AutoNation repurchased $100 million in shares in the fourth quarter, totaling $460 million for the year, representing a 7% reduction in shares outstanding. The call also emphasized the company's focus on after-sales services, which contributed to a 5% increase in same-store gross profit, and AutoNation's commitment to optimizing its portfolio by divesting eight underperforming stores.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.