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Asbury (ABG)
NYSE:ABG
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Asbury
(NYSE:ABG)
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Rating:74Outperform
Price Target:
$272.00
▲(13.81% Upside)
Asbury Automotive Group's stock score is driven by strong financial performance and a positive earnings call, indicating robust revenue growth and strategic initiatives. The attractive valuation further supports the score. However, technical analysis suggests caution due to short-term bearish momentum, and high leverage remains a risk factor.
Asbury (ABG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.70B
Dividend YieldN/A
Average Volume (3M)143.38K
Price to Earnings (P/E)8.7
Beta (1Y)1.20
Revenue Growth8.39%
EPS Growth40.35%
CountryUS
Employees15,000
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)7.43
Shares Outstanding19,660,639
10 Day Avg. Volume154,807
30 Day Avg. Volume143,378
Financial Highlights & Ratios
PEG Ratio-0.45
Price to Book (P/B)1.38
Price to Sales (P/S)0.28
P/FCF Ratio13.32
Enterprise Value/Market Cap1.96
Enterprise Value/Revenue0.53
Enterprise Value/Gross Profit3.14
Enterprise Value/Ebitda8.79
Forecast
1Y Price Target
$253.71Price Target Upside6.15% Upside
Rating ConsensusHold
Number of Analyst Covering8
Asbury Business Overview & Revenue Model
Company DescriptionAsbury Automotive Group, Inc., together with its subsidiaries, operates as an automotive retailer in the United States. It offers a range of automotive products and services, including new and used vehicles; and vehicle repair and maintenance services, replacement parts, and collision repair services. The company also provides finance and insurance products, including arranging vehicle financing through third parties; and aftermarket products, such as extended service contracts, guaranteed asset protection debt cancellation, prepaid maintenance, and credit life and disability insurance. As of December 31, 2021, the company owned and operated 205 new vehicle franchises representing 31 brands of automobiles at 155 dealership locations; and 35 collision centers in the United States. Asbury Automotive Group, Inc. was founded in 1996 and is headquartered in Duluth, Georgia.
How the Company Makes MoneyAsbury generates revenue primarily through the sale of new and used vehicles, along with financing and insurance products associated with these sales. The company earns significant income from its service department, which includes routine maintenance, repairs, and parts sales. Additionally, Asbury benefits from ancillary products like vehicle warranties and service contracts. Key revenue streams include gross profit from vehicle sales, service and parts revenue, and F&I (finance and insurance) income. The company also engages in strategic partnerships with automotive manufacturers and financial institutions, enhancing its product offerings and securing additional revenue opportunities.
Asbury Earnings Call Summary
Earnings Call Date:Jul 29, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Positive
The earnings call presented a positive outlook for Asbury Automotive Group, highlighting strong revenue and profit margins, successful strategic acquisitions, and operational efficiency improvements. However, challenges such as declining used vehicle volumes, tariff uncertainties, and increased SG&A costs due to system implementations were noted. Despite these challenges, the overall sentiment leans towards optimism given the company's strategic initiatives and market positioning.Q2-2025 Updates
Positive Updates
Strong Revenue Growth and Profit Margins
Asbury Automotive Group generated $4.4 billion in revenue, with a gross profit of $752 million and a gross profit margin of 17.2%, along with an adjusted operating margin of 5.8% and an adjusted EBITDA of $256 million.
New and Used Vehicle Performance
Same-store new vehicle revenue was up 9% year-over-year with units up 7%, while used vehicle profitability remained strong despite a 4% decrease in unit volume.
Parts and Service Business Growth
Same-store gross profit for parts and service was up 7%, with a gross profit margin of 59.2% and a fixed absorption rate over 100%.
Herb Chambers Acquisition
Successfully closed on the acquisition of Herb Chambers Automotive Group, which had a full-year 2024 adjusted EBITDA of $176.8 million. The acquisition is expected to enhance Asbury's presence in New England.
Operational Efficiency
Same store adjusted SG&A as a percentage of gross profit was 63.2%, an improvement of over 100 basis points from the second quarter of 2024.
Negative Updates
Decline in Used Vehicle Volume
Used vehicle unit volume declined by 4% year-over-year, attributed to a constrained supply environment.
Tariff Impact Uncertainty
Concerns about how various tariff decisions might affect consumer pricing and impact the outlook for the second half of the year.
Adjusted SG&A Costs
Adjusted SG&A as a percentage of gross profit was impacted by Tekion implementation costs, and there are anticipations of maintaining SG&A in the mid-60s due to potential tariff and trade developments.
Impact of Deferred Revenue Headwind
The deferred revenue headwind from TCA resulted in a $0.43 decrease in adjusted EPS for the quarter.
Company Guidance
In Asbury Automotive Group's second quarter 2025 earnings call, the company provided several metrics and insights into their performance and future outlook. They reported $4.4 billion in revenue, a gross profit of $752 million, and a gross profit margin of 17.2%. Their adjusted operating margin was 5.8%, with an adjusted earnings per share (EPS) of $7.43 and adjusted EBITDA of $256 million. Despite the SAAR decline, new vehicle gross profit per unit (GPU) was resilient, trending towards $2,500 to $3,000. Meanwhile, used retail gross profit per unit was $1,729, showing sequential growth. The parts and service business also performed well, with same-store gross profit up 7% and a margin of 59.2%. The company's SG&A as a percentage of gross profit improved to 63.2%, and they plan to continue reducing this over time. Asbury is focusing on strategic acquisitions, like the recent Herb Chambers acquisition, while also divesting nine stores, with proceeds aiding leverage reduction efforts. They anticipate prioritizing leverage reduction over the next 12 to 18 months, while also remaining open to opportunistic share repurchases.Asbury Financial Statement Overview
Summary
Asbury demonstrates strong revenue growth and cash flow generation, which are positive indicators for future performance. However, challenges with declining profit margins and high leverage could impact financial stability. Continued focus on cost management and debt reduction will be crucial for sustaining growth and profitability.Income Statement
Asbury's income statement shows strong revenue growth with a 24.95% increase in TTM, indicating robust sales performance. However, the gross profit margin has slightly decreased over time, and the net profit margin remains modest at 2.52%. The EBIT and EBITDA margins have also seen a decline, suggesting potential cost pressures or inefficiencies.75
Positive
Balance Sheet
The balance sheet reflects a high debt-to-equity ratio of 1.21, indicating significant leverage, which poses a risk in volatile markets. However, the company has improved its equity position over time, and the return on equity is healthy at 15.14%, showcasing effective use of shareholder funds.68
Positive
Cash Flow
Cash flow analysis reveals a strong free cash flow growth rate of 34.89% in the TTM, highlighting improved cash generation. The operating cash flow to net income ratio is moderate, suggesting efficient cash conversion, while the free cash flow to net income ratio of 81.82% indicates good cash profitability.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 17.26B | 17.19B | 14.80B | 15.43B | 9.84B | 7.13B |
| Gross Profit | 2.93B | 2.95B | 2.76B | 3.10B | 1.90B | 1.22B |
| EBITDA | 1.05B | 885.00M | 1.15B | 1.55B | 838.60M | 448.50M |
| Net Income | 540.00M | 430.30M | 602.50M | 997.30M | 532.40M | 254.40M |
Balance Sheet | ||||||
| Total Assets | 10.13B | 10.34B | 10.16B | 8.02B | 8.00B | 3.68B |
| Cash, Cash Equivalents and Short-Term Investments | 54.80M | 83.80M | 51.90M | 240.70M | 189.90M | 1.40M |
| Total Debt | 4.55B | 5.28B | 5.48B | 3.69B | 4.56B | 2.37B |
| Total Liabilities | 6.35B | 6.83B | 6.92B | 5.12B | 5.89B | 2.77B |
| Stockholders Equity | 3.78B | 3.50B | 3.24B | 2.90B | 2.12B | 905.50M |
Cash Flow | ||||||
| Free Cash Flow | 789.50M | 363.00M | 170.70M | 588.10M | 1.08B | 603.70M |
| Operating Cash Flow | 964.90M | 671.20M | 313.00M | 696.00M | 1.16B | 652.50M |
| Investing Cash Flow | 9.90M | -137.20M | -1.68B | 464.70M | -3.92B | -820.80M |
| Financing Cash Flow | -987.10M | -510.30M | 1.18B | -1.10B | 2.93B | 166.20M |
Asbury Technical Analysis
Negative
239.00
Price Trends
240.35
Negative
239.43
Negative
244.46
Negative
Market Momentum
-1.54
Positive
43.70
Neutral
36.45
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ABG, the sentiment is Negative. The current price of 239 is below the 20-day moving average (MA) of 247.12, below the 50-day MA of 240.35, and below the 200-day MA of 244.46, indicating a bearish trend. The MACD of -1.54 indicates Positive momentum. The RSI at 43.70 is Neutral, neither overbought nor oversold. The STOCH value of 36.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ABG.
Asbury Risk Analysis
Asbury disclosed 28 risk factors in its most recent earnings report. Asbury 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
Asbury Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $4.70B | 8.73 | 15.19% | ― | 8.39% | 40.35% | |
71 Outperform | $5.64B | 12.07 | 15.20% | 0.45% | 19.75% | -10.74% | |
71 Outperform | $8.18B | 9.45 | 12.75% | 0.68% | 10.25% | 9.08% | |
70 Outperform | $8.21B | 13.64 | 25.67% | ― | 3.15% | -12.49% | |
63 Neutral | $11.34B | 11.96 | 17.04% | 2.91% | 2.39% | 5.84% | |
63 Neutral | $2.56B | 16.69 | 20.33% | 1.91% | 4.48% | -16.26% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
ABG
Asbury
239.00
0.41
0.17%
AN
AutoNation
217.66
38.74
21.65%
GPI
Group 1 Automotive
435.53
54.19
14.21%
LAD
Lithia Motors
318.93
3.45
1.09%
PAG
Penske Automotive Group
171.74
14.10
8.94%
SAH
Sonic Automotive
75.00
17.70
30.89%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.