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Autonation (AN)
NYSE:AN
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AutoNation
(NYSE:AN)
Rating:72Outperform
Price Target:
$202.00
▲( 10.86% Upside)
Positive Factors
Revenue Growth
AutoNation reported a revenue increase of 3% year-over-year to $6.7 billion, surpassing consensus expectations.
Vehicle Sales
New vehicle retail unit sales increased by 6% year-over-year, indicating strong performance in this segment.
Negative Factors
Operating Margins
Operating margins were softer, decreasing from the previous year.
Profit Margins
Gross profit margins decreased by 30 basis points year-over-year to 18.2%.
AutoNation (AN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.87B
Dividend YieldN/A
Average Volume (3M)484.38K
Price to Earnings (P/E)10.8
Beta (1Y)0.97
Revenue Growth-0.24%
EPS Growth-19.76%
CountryUS
Employees25,100
SectorConsumer Cyclical
Sector Strength74
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)4.68
Shares Outstanding37,701,138
10 Day Avg. Volume395,380
30 Day Avg. Volume484,382
Financial Highlights & Ratios
PEG Ratio-58.85
Price to Book (P/B)2.92
Price to Sales (P/S)0.00
P/FCF Ratio-19.79
Enterprise Value/Market Cap2.29
Enterprise Value/Revenue0.15
Enterprise Value/Gross Profit3.27
Enterprise Value/Ebitda2.52
Forecast
1Y Price Target
$194.29Price Target Upside6.63% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
AutoNation Business Overview & Revenue Model
Company DescriptionAutoNation, Inc. (AN) is the largest automotive retailer in the United States, headquartered in Fort Lauderdale, Florida. The company operates a network of new and used vehicle dealerships, providing a wide range of automotive products and services. AutoNation offers new vehicles from various leading manufacturers, used vehicles, automotive maintenance and repair services, and automotive finance and insurance products. Its business model is designed to cater to the diverse needs of automotive consumers across the country.
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 demonstrates stable revenue performance but faces challenges with profitability margins and cash management. The balance sheet reflects high leverage, which could pose financial risks if not managed effectively. While the company remains profitable, improvements in operational efficiency and cash flow generation are necessary to strengthen financial stability.Income Statement
AutoNation's income statement shows a stable revenue base with a slight growth in the TTM period. Gross Profit Margin stands at 17.83% for TTM, showing consistent profitability. However, there is a decline in Net Profit Margin from 3.88% in 2024 to 2.51% in TTM, indicating rising costs or expenses. The EBIT and EBITDA margins are stable, but lower compared to earlier years, reflecting operational efficiency challenges.75
Positive
Balance Sheet
The balance sheet reveals a relatively high Debt-to-Equity Ratio, increasing from 3.52 in 2024 to 9.86 in TTM, highlighting significant leverage. The company maintains a moderate Equity Ratio of 18.03% in TTM, suggesting a dependence on debt financing. With a declining Return on Equity from 28.17% in 2024 to 28.19% in TTM, profitability on shareholder equity shows slight improvement but may be strained by high leverage.68
Positive
Cash Flow
Cash flow analysis shows a concerning decline in Free Cash Flow, turning negative in TTM, which could affect liquidity and operational flexibility. The Operating Cash Flow to Net Income Ratio reduced significantly, indicating challenges in converting income into cash. Free Cash Flow to Net Income Ratio is negative, signaling potential cash management issues.60
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 26.97B | 26.77B | 26.95B | 26.98B | 25.84B | 20.39B | Gross Profit |
| 4.81B | 4.79B | 5.13B | 5.27B | 4.95B | 3.57B | EBIT |
| 1.30B | 1.31B | 1.65B | 2.02B | 1.90B | 1.08B | EBITDA |
| 1.59B | 1.60B | 1.87B | 2.17B | 2.09B | 842.70M | Net Income Common Stockholders |
| 677.60M | 692.20M | 1.02B | 1.38B | 1.37B | 381.60M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 70.50M | 59.80M | 60.80M | 72.60M | 60.40M | 569.60M | Total Assets |
| 13.33B | 13.39B | 11.98B | 10.06B | 8.94B | 9.89B | Total Debt |
| 9.03B | 8.65B | 8.03B | 6.42B | 4.95B | 5.19B | Net Debt |
| 8.96B | 8.59B | 7.97B | 6.35B | 4.89B | 4.62B | Total Liabilities |
| 10.92B | 10.54B | 9.77B | 8.01B | 6.57B | 6.65B | Stockholders Equity |
| 2.40B | 2.46B | 2.21B | 2.05B | 2.38B | 3.24B |
| Cash Flow | Free Cash Flow | ||||
| -342.30M | -13.80M | 313.70M | 1.34B | 1.41B | 1.05B | Operating Cash Flow |
| 15.10M | 314.70M | 724.00M | 1.67B | 1.63B | 1.21B | Investing Cash Flow |
| -54.50M | 12.30M | -569.90M | -479.30M | -460.30M | -73.70M | Financing Cash Flow |
| 87.70M | -300.60M | -172.50M | -1.15B | -1.68B | -606.70M |
AutoNation Technical Analysis
Positive
182.21
Price Trends
172.02
Positive
176.50
Positive
173.33
Positive
Market Momentum
3.72
Positive
54.23
Neutral
23.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AN, the sentiment is Positive. The current price of 182.21 is above the 20-day moving average (MA) of 181.49, above the 50-day MA of 172.02, and above the 200-day MA of 173.33, indicating a bullish trend. The MACD of 3.72 indicates Positive momentum. The RSI at 54.23 is Neutral, neither overbought nor oversold. The STOCH value of 23.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $10.73B | 11.43 | 18.57% | 2.74% | 3.29% | -1.29% | |
76 Outperform | $5.51B | 12.00 | 16.25% | 0.45% | 15.13% | -15.98% | |
75 Outperform | $8.11B | 9.81 | 12.95% | 0.68% | 12.96% | -6.25% | |
72 Outperform | $4.43B | 10.72 | 11.92% | ― | 11.11% | -23.41% | |
72 Outperform | $6.87B | 10.78 | 28.45% | ― | -0.24% | -19.76% | |
68 Neutral | $2.28B | 9.58 | 24.52% | 1.94% | 1.59% | 43.91% | |
62 Neutral | $6.84B | 11.22 | 2.83% | 3.95% | 2.65% | -21.93% |
* Consumer Cyclical Sector Average
Performance Comparison
AN
AutoNation
182.21
12.46
7.34%
ABG
Asbury
225.19
-7.25
-3.12%
GPI
Group 1 Automotive
425.94
117.82
38.24%
LAD
Lithia Motors
311.45
56.12
21.98%
PAG
Penske Automotive Group
162.17
13.95
9.41%
SAH
Sonic Automotive
67.14
12.05
21.87%
AutoNation Earnings Call Summary
Earnings Call Date:Apr 25, 2025
(Q1-2025)
| % Change Since: 5.10%|
Next Earnings Date:Jul 17, 2025
Earnings Call Sentiment Positive
The earnings call presented a largely positive outlook with significant growth in new and used vehicle sales, strong cash flow allowing for share repurchases, and improved adjusted EPS. Record after-sales profits and strategic acquisitions further highlighted a successful quarter. However, the impact of tariffs and a minor decrease in adjusted net income were noted as challenges. Overall, positive developments outweighed the concerns.Q1-2025 Updates
Positive Updates
Strong New Unit Growth
Same-store new vehicle unit sales increased by 7% for the quarter compared to the prior year, with Premium Luxury up 14%, domestic up 6%, and import up 2%.
Used Vehicle Profitability Increase
Used vehicle unit profitability increased by 13% to $1,662, reflecting a focus on margin costs, inventory levels, and mix.
Record After-Sales Profits
After-sales delivered record gross profit and expanded margin by 40 basis points from the previous year.
Strong Cash Flow and Share Repurchases
Cash flow generation was strong, allowing for $225 million in share repurchases at an average price of $165 per share, reducing share count by 4%.
Improved Adjusted EPS
Adjusted EPS grew by 4% from a year ago, marking the first year-over-year increase in adjusted EPS in eight quarters.
Successful M&A Activity
Acquired two stores in the Greater Denver, Colorado area, generating approximately $220 million of revenue and reflecting a strategy to add store density.
AN Finance Profitability
AN Finance crossed over into profitability well ahead of expectations with $460 million in originations during the quarter.
Negative Updates
Decreased Adjusted Net Income
Adjusted net income decreased by 3% year-over-year, the smallest decline in three years but still a decrease.
Impact of Tariffs
Tariffs introduced uncertainty, with potential impacts on new unit availability and pricing, affecting customer demand patterns.
Moderation of New Vehicle Unit Profitability
New vehicle unit profitability was down seasonally from the fourth quarter, reflecting a normal trend.
Company Guidance
In the first quarter of the 2025 fiscal year, AutoNation demonstrated robust performance with several key metrics indicating strong growth. New vehicle sales increased by 7% on a same-store basis, with premium luxury sales rising by 14%, domestic by 6%, and imports by 2%. Used vehicle unit profitability improved by 13% to $1,662, contributing to a 12% increase in total gross profit. Customer Financial Services (CFS) income per unit rose to $2,703, a 3% increase from the previous year, driven by a strong product attachment rate. After-sales continued to excel, achieving a 40 basis point margin expansion and a 4% growth in same-store gross profit. Operating cash flow remained strong, enabling $225 million in share repurchases and strategic acquisitions like the Ford Arapahoe and Mazda Arapahoe stores, which generated $220 million in revenue in 2024. Despite potential tariff impacts, the company remains confident, leveraging its broad portfolio to mitigate risks and maintain market competitiveness, while continuing to focus on less tariff-impacted areas such as used cars and after-sales services.AutoNation Corporate Events
Private Placements and Financing
AutoNation Completes $700 Million Securitization Transaction
Positive
May 21, 2025
On May 21, 2025, AutoNation announced the completion of a $700 million asset-backed securitization transaction through its captive finance company, AutoNation Finance. This inaugural transaction involved the issuance of seven classes of notes with a weighted-average interest rate of 4.90%, secured by $714.3 million of automobile loan contracts. The net proceeds of approximately $696.4 million will be used to reduce existing debt and support corporate purposes. The transaction was well-received, allowing AutoNation to secure a competitive interest rate and increase the offering size by $200 million, enhancing its capital allocation flexibility.
The most recent analyst rating on (AN) stock is a Buy with a $215.00 price target. To see the full list of analyst forecasts on AutoNation stock, see the AN Stock Forecast page.
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.