AutoNation (AN) AI Stock Analysis

• Market Cap: $8.21B
• Dividend Yield: N/A
• Average Volume (3M): 426.47K
• Price to Earnings (P/E): 13.6
• Beta (1Y): 0.99
• Revenue Growth: 3.15%
• EPS Growth: -12.49%
• Country: US
• Employees: 25,100
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Dealerships
• EPS (TTM): 5.46
• Shares Outstanding: 37,706,017
• 10 Day Avg. Volume: 472,759
• 30 Day Avg. Volume: 426,471
• PEG Ratio: -0.39
• Price to Book (P/B): 2.76
• Price to Sales (P/S): 0.25
• P/FCF Ratio: -491.06
• Enterprise Value/Market Cap: 2.05
• Enterprise Value/Revenue: 0.61
• Enterprise Value/Gross Profit: 3.42
• Enterprise Value/Ebitda: 10.74
• 1Y Price Target: $228.71
• Price Target Upside: 5.08% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 70 Outperform
• Price Target: $231.00 ▲(6.13% Upside)

AutoNation's strong technical indicators and positive earnings call sentiment are the most significant factors driving the score. Financial performance shows stability but also highlights areas for improvement, particularly in profitability and cash flow. The valuation is reasonable, though the lack of a dividend yield may deter some investors.

Positive Factors

Revenue Growth

The consistent revenue growth, particularly in new and used vehicle sales, indicates strong market demand and effective sales strategies, contributing to the company's long-term stability and market position.

After-Sales Performance

The record performance in after-sales services underscores the company's ability to generate recurring revenue, enhancing customer loyalty and providing a stable income stream beyond initial vehicle sales.

EPS Growth

The significant EPS growth reflects improved profitability and operational efficiency, indicating strong financial health and the potential for sustained shareholder value creation.

Negative Factors

High Leverage

High leverage poses financial risks by increasing interest obligations and limiting financial flexibility, potentially impacting the company's ability to invest in growth opportunities.

Declining Margins

Declining margins suggest challenges in cost management and operational efficiency, which could pressure profitability and hinder the company's ability to maintain competitive pricing.

Negative Cash Flow Growth

Challenges in generating cash from operations may limit the company's ability to fund new initiatives, pay down debt, or return capital to shareholders, impacting long-term financial stability.

AutoNation Business Overview & Revenue Model

Company Description

AutoNation, Inc. is the largest automotive retailer in the United States, operating a network of over 300 dealerships across various states. The company focuses on new and used vehicle sales, automotive service and repair, and parts distribution. AutoNation offers a diverse range of vehicle brands, including both domestic and foreign manufacturers, and is committed to enhancing the customer experience through innovative digital tools and services.

How the Company Makes Money

AutoNation generates revenue primarily through the sale of new and used vehicles, which constitutes a significant portion of its overall income. The company also earns money from automotive financing and insurance products, often through partnerships with financial institutions. Additionally, AutoNation has a robust service department that provides maintenance and repair services, contributing to recurring revenue streams. The company benefits from its extensive footprint and brand recognition, as well as its investments in digital sales platforms, which enhance customer engagement and streamline the purchasing process.

AutoNation Financial Statement Overview

Summary

AutoNation shows stable revenue growth but faces challenges in profitability and cash flow generation. High leverage and declining margins highlight potential financial risks, while some resilience is offered by the ability to generate cash relative to net income.

Income Statement

AutoNation's income statement shows moderate performance with a slight revenue growth of 1.83% TTM, indicating stability in sales. However, the gross profit margin of 17.91% and net profit margin of 2.31% TTM suggest room for improvement in cost management and profitability. The EBIT and EBITDA margins have declined over the years, reflecting potential challenges in operational efficiency.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 3.77 TTM, indicating significant leverage which could pose financial risk. Return on equity is 26.13% TTM, showing decent profitability relative to shareholder investment. The equity ratio of 18.20% TTM suggests a lower proportion of equity financing, highlighting potential vulnerability to financial fluctuations.

Cash Flow

Cash flow analysis indicates negative free cash flow growth of 32.05% TTM, reflecting challenges in generating cash from operations. The operating cash flow to net income ratio is negative, suggesting inefficiencies in converting income into cash. However, the free cash flow to net income ratio of 3.00 TTM indicates some ability to generate cash relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	27.46B	26.77B	26.95B	26.98B	25.84B	20.39B
Gross Profit	4.92B	4.79B	5.13B	5.27B	4.95B	3.57B
EBITDA	1.57B	1.60B	1.92B	2.21B	2.12B	906.50M
Net Income	633.80M	692.20M	1.02B	1.38B	1.37B	381.60M
Balance Sheet
Total Assets	13.57B	13.00B	11.98B	10.06B	8.94B	9.89B
Cash, Cash Equivalents and Short-Term Investments	62.90M	59.80M	60.80M	72.60M	60.40M	569.60M
Total Debt	9.30B	8.65B	8.03B	6.42B	4.95B	5.19B
Total Liabilities	11.10B	10.54B	9.77B	8.01B	6.57B	6.65B
Stockholders Equity	2.47B	2.46B	2.21B	2.05B	2.38B	3.24B
Cash Flow
Free Cash Flow	-452.00M	-13.80M	313.70M	1.34B	1.41B	1.05B
Operating Cash Flow	-150.50M	314.70M	724.00M	1.67B	1.63B	1.21B
Investing Cash Flow	-61.80M	12.30M	-569.90M	-479.30M	-460.30M	-73.70M
Financing Cash Flow	199.90M	-300.60M	-172.50M	-1.15B	-1.68B	-606.70M

AutoNation Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 217.66
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AN, the sentiment is Neutral. The current price of 217.66 is below the 20-day moving average (MA) of 221.49, above the 50-day MA of 210.84, and above the 200-day MA of 188.53, indicating a neutral trend. The MACD of 1.50 indicates Positive momentum. The RSI at 49.64 is Neutral, neither overbought nor oversold. The STOCH value of 42.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AN.

AutoNation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ABG	74 Outperform	$4.70B	8.73	14.30%	―	8.39%	40.35%
GPI	71 Outperform	$5.64B	12.07	15.20%	0.45%	19.75%	-10.74%
LAD	71 Outperform	$8.18B	9.45	12.75%	0.68%	10.25%	9.08%
AN	70 Outperform	$8.21B	13.64	27.24%	―	3.15%	-12.49%
PAG	63 Neutral	$11.34B	11.96	17.04%	2.91%	2.39%	5.84%
SAH	63 Neutral	$2.56B	16.69	20.33%	1.91%	4.48%	-16.26%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

AutoNation Corporate Events

AutoNation Completes $700 Million Securitization Transaction

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.