AutoNation (NYSE:AN), one of the largest car dealership chains in the U.S., is grappling with major disruptions after its software provider, CDK Global, was hit with a cyberattack. The attack is likely ransomware and has forced AutoNation and other affected dealerships to use manual processes like spreadsheets and pen-and-paper to manage sales, repairs, and orders.
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Despite the chaos, AutoNation is trying to keep things running by finding workarounds to stay open while CDK sorts out its issues, and investors don’t seem too worried, as shares are little changed at the time of writing.
However, it’s no secret that the longer this drags on, the more it will impact the firm’s bottom line. Interestingly, AutoNation has beaten earnings estimates for six straight quarters, as shown in the image below. Nevertheless, the cyberattack could cause this streak of wins to end if it’s not resolved quickly.
Insiders Are Not Excited about AN Stock
Insiders at AutoNation were already not excited about AN stock, and the recent events definitely aren’t helping. When looking at insider activity, there seems to be a lot of selling. In fact, insiders have sold $1.7 million worth of shares in the past three months. As a result, confidence from within appears to be low, as the Insider Confidence Signal for AN stock is negative and is below the sector average.
Is AN Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AN stock based on five Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 5% year-to-date increase, the average AN price target of $184.50 per share implies 16.74% upside potential.
