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AutoNation
(NYSE:AN)
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Rating:62Neutral
Price Target:
$225.00
▲(8.08% Upside)
Action:Reiterated
Date:08/01/26
The score is held back most by weak TTM cash generation and declining TTM revenue/margins despite balance-sheet improvement. Offsetting factors include a supportive technical uptrend (price above key moving averages), an attractive low P/E valuation, and an earnings call that highlighted strong aftersales/finance performance and robust quarterly free cash flow—but with higher uncertainty after the withdrawal of prior 2026 outlook.
Positive Factors
Improved Balance Sheet / Lower Leverage
Material de-leveraging meaningfully reduces financial risk and increases runway for cyclical downturns. Lower leverage supports capital deployment (buybacks/ABS), lowers interest burden, and increases flexibility to invest in stores, technology, or finance growth without forcing distress sales.
Negative Factors
Weak Cash Generation
Near-breakeven free cash flow and poor cash conversion materially reduce financial flexibility. Durable investments, debt servicing, and opportunistic M&A or buybacks become more sensitive to inventory swings and working-capital shocks, increasing operational risk during industry volatility.
Read all positive and negative factors
Positive Factors
Negative Factors
Improved Balance Sheet / Lower Leverage
Material de-leveraging meaningfully reduces financial risk and increases runway for cyclical downturns. Lower leverage supports capital deployment (buybacks/ABS), lowers interest burden, and increases flexibility to invest in stores, technology, or finance growth without forcing distress sales.
Read all positive factors
AutoNation (AN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.11B
Dividend YieldN/A
Average Volume (3M)383.59K
Price to Earnings (P/E)9.8
Beta (1Y)0.81
Revenue Growth-0.06%
EPS Growth35.87%
CountryUS
Employees24,800
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)21.68
Shares Outstanding33,461,494
10 Day Avg. Volume349,419
30 Day Avg. Volume383,594
Financial Highlights & Ratios
PEG Ratio12.03
Price to Book (P/B)3.36
Price to Sales (P/S)0.28
P/FCF Ratio-39.83
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$243.83Price Target Upside17.13% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)21.69
Revenue Forecast (FY)$27.86B
AutoNation Business Overview & Revenue Model
Company Description
AutoNation, Inc. functions as an automotive retailer throughout the United States, organizing its operations across three primary segments: Domestic, Import, and Premium Luxury. The company offers a comprehensive array of automotive products and s...
How the Company Makes Money
AutoNation primarily makes money by generating revenue and gross profit across several dealership-related streams: (1) New vehicle sales: AutoNation sells new cars and light trucks through franchised dealerships. Revenue is recognized from vehicle...
AutoNation Earnings Call Summary
Earnings Call Date:May 01, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call portrays a fundamentally strong operational and financial performance despite industry headwinds. Key positives include record aftersales gross profit, continued adjusted EPS growth (five consecutive quarters), robust free cash flow ($256M), successful scaling of AutoNation Finance (portfolio +$1B YoY) and aggressive share repurchases, supported by a healthy balance sheet (2.57x leverage). Offsetting these positives are declines in new vehicle volumes (same‑store down 9%), BEV sales collapsing >50% YoY with disproportionate impact on premium luxury, higher SG&A as a percent of gross profit due to strategic investments, and short‑term margin/volume uncertainty driven by macro and geopolitical factors. Overall, management emphasizes durable, high‑margin aftersales and finance businesses and disciplined capital allocation while acknowledging near‑term uncertainty.Positive Updates
Adjusted EPS Growth
Adjusted EPS of $4.69 in Q1, marking the fifth consecutive quarter of year‑over‑year adjusted EPS growth.
Negative Updates
Revenue Slight Decline
Total revenue of $6.6 billion in Q1 vs $6.7 billion in Q1 last year, reflecting industry volume headwinds and tough year‑over‑year comps.
Read all updates
Q1-2026 Updates
Positive
Negative
Adjusted EPS Growth
Adjusted EPS of $4.69 in Q1, marking the fifth consecutive quarter of year‑over‑year adjusted EPS growth.
Read all positive updates
Company Guidance
Management withdrew the prior 2026 outlook given macro/geopolitical uncertainty and said industry volumes will likely be below the earlier up-to-5% impact forecast, but reiterated disciplined capital allocation and metric targets: Q1 adjusted EPS was $4.69 (fifth consecutive YoY increase), total revenue $6.6B, gross profit $1.2B (18.5% margin), adjusted operating income $312M (down 7% YoY) and adjusted free cash flow $256M (155% of adjusted net income). They expect SG&A to moderate over the year but remain above the 66–67% of gross profit target (Q1 was 69.8%), with management guiding to roughly a 150‑bp improvement through the balance of the year and normalization toward target into early next year; full‑year CapEx is expected to be $300–325M (CapEx/Depreciation 0.9x in Q1). Business‑level guidance/updates include aftersales record gross profit $593M (same‑store revenue +4%, same‑store gross profit +3%, aftersales margin 48.6%, technician headcount +3%), CFS per‑unit profit +6%, AutoNation Finance profit $9M and portfolio $2.45B (originations ~$460M in Q1, penetration 17% and trending toward ~20%, ABS ~$750M, debt funding 90% of portfolio, 30‑day delinquencies 2.1% expected to normalize toward ~3%), new vehicle units down ~9% same‑store with GPU >$2,500 (+~$100 vs Q4), 46 days’ supply, and used metrics showing used‑to‑new = 1, used ASP +5% YoY, used GPU ≈$1,600 (up >$150 sequential), ~25,000 units ready for sale/32,600 total inventory; capital deployment remains active (Q1 repurchases $300M, ~ $400M YTD including post‑March, nearly 2M shares or ~6% of beginning shares repurchased) while leverage sits at 2.57x EBITDA (target 2–3x).AutoNation Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
70
Positive
Cash Flow
35
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 27.45B | 27.63B | 26.77B | 26.95B | 26.98B | 25.84B |
| Gross Profit | 4.83B | 4.70B | 4.79B | 5.13B | 5.27B | 4.95B |
| EBITDA | 1.41B | 1.50B | 1.60B | 1.92B | 2.21B | 2.12B |
| Net Income | 739.60M | 649.10M | 692.20M | 1.02B | 1.38B | 1.37B |
Balance Sheet | ||||||
| Total Assets | 15.48B | 14.39B | 13.00B | 11.98B | 10.06B | 8.94B |
| Cash, Cash Equivalents and Short-Term Investments | 53.30M | 58.60M | 101.50M | 60.80M | 72.60M | 60.40M |
| Total Debt | 3.56B | 10.18B | 8.65B | 8.12B | 6.42B | 4.95B |
| Total Liabilities | 13.23B | 12.05B | 10.54B | 9.77B | 8.01B | 6.57B |
| Stockholders Equity | 2.26B | 2.34B | 2.46B | 2.21B | 2.05B | 2.38B |
Cash Flow | ||||||
| Free Cash Flow | 12.10M | -197.50M | -13.80M | 313.70M | 1.34B | 1.41B |
| Operating Cash Flow | 293.30M | 111.90M | 314.70M | 724.00M | 1.67B | 1.63B |
| Investing Cash Flow | -904.40M | -687.00M | 12.30M | -569.90M | -479.30M | -460.30M |
| Financing Cash Flow | 646.10M | 557.50M | -300.60M | -172.50M | -1.15B | -1.68B |
AutoNation Technical Analysis
Positive
208.18
Price Trends
195.50
Positive
195.84
Positive
201.15
Positive
Market Momentum
3.84
Negative
62.02
Neutral
75.66
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 208.18 is above the 20-day moving average (MA) of 203.57, above the 50-day MA of 195.50, and above the 200-day MA of 201.15, indicating a bullish trend. The MACD of 3.84 indicates Negative momentum. The RSI at 62.02 is Neutral, neither overbought nor oversold. The STOCH value of 75.66 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 16 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $14.27B | 16.00 | 16.43% | 2.54% | 4.13% | -5.43% | |
65 Neutral | $4.31B | 8.65 | 17.42% | ― | 4.12% | -2.47% | |
65 Neutral | $8.47B | 12.72 | 7.00% | 0.65% | 1.97% | -10.60% | |
62 Neutral | $7.11B | 9.80 | 31.68% | ― | -0.06% | 35.87% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
60 Neutral | $8.13B | 35.57 | 3.67% | ― | -1.69% | -58.01% | |
52 Neutral | $3.42B | 11.92 | 9.96% | 0.63% | 0.81% | -33.60% |
* Consumer Cyclical Sector Average
AN
AutoNation
212.40
23.13
12.22%
ABG
Asbury
231.70
7.76
3.47%
KMX
CarMax
57.26
2.60
4.76%
GPI
Group 1 Automotive
286.77
-118.31
-29.21%
LAD
Lithia Motors
385.42
103.16
36.55%
PAG
Penske Automotive Group
217.31
53.00
32.26%
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.