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Penske Automotive Group (PAG)
NYSE:PAG
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Penske Automotive Group
(NYSE:PAG)78Outperform
Positive Factors
Earnings
Penske Automotive reported results that beat consensus estimates, leading to an increase in sales, EBITDA, and EPS estimates for future years.
Financial Performance
The company's strong inventory and premium brand exposure allow it to outperform much of the peer group with leading front-end gross profit units.
Shareholder Returns
Penske Automotive has a balanced capital allocation framework, increasing dividends and providing significant shareholder returns through dividends and repurchases.
Negative Factors
Penske Automotive Group (PAG) vs. S&P 500 (SPY)
Market Cap
$11.13B
Dividend Yield2.66%
Average Volume (3M)213.83K
Price to Earnings (P/E)12.1
Beta (1Y)0.74
Revenue Growth3.14%
EPS Growth-11.22%
CountryUS
Employees28,000
SectorConsumer Cyclical
Sector Strength53
IndustryVehicles
Share Statistics
EPS (TTM)13.74
Shares Outstanding66,749,220
10 Day Avg. Volume233,409
30 Day Avg. Volume213,827
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.37
Price to Cash Flow (P/CF)12.80
P/FCF Ratio18.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$172.00Price Target Upside1.65% Upside
Rating ConsensusHold
Number of Analyst Covering5
Penske Automotive Group Business Overview & Revenue Model
Company DescriptionPenske Automotive Group (PAG) is a leading global transportation services company that operates automotive and commercial truck dealerships across the Americas, Europe, and Australia. The company provides a wide range of automotive products and services, including new and used vehicle sales, vehicle maintenance and repair services, and the sale of automotive finance and insurance products. In addition to its retail automotive operations, Penske Automotive Group also operates a number of commercial truck dealerships offering mediums and heavy-duty trucks through its Premier Truck Group subsidiary.
How the Company Makes MoneyPenske Automotive Group generates revenue primarily through the sale of new and used vehicles, which constitutes the largest portion of its income. The company also earns substantial revenue from service and parts operations, which includes maintenance, repair, and the sale of automotive parts. Additionally, PAG benefits from finance and insurance products sold in conjunction with vehicle purchases, providing a significant source of high-margin revenue. The commercial truck segment, operated under Premier Truck Group, contributes to the company's earnings by selling and servicing commercial vehicles. Strategic partnerships with major automotive manufacturers and financial institutions enhance PAG's offerings and facilitate competitive financing and insurance options for customers, further driving revenue.
Penske Automotive Group Financial Statement Overview
Summary
Penske Automotive Group exhibits strong financial health with consistent revenue growth, efficient cost management, and improved leverage. Despite slight declines in net profit margin and return on equity, the overall financial position remains solid with strong cash generation capabilities.Income Statement
Penske Automotive Group has demonstrated consistent revenue growth over the years with a recent increase from $29.53 billion to $30.45 billion. The gross profit margin remains robust at approximately 16.5%, indicating efficient cost management. However, the net profit margin slightly decreased from 3.57% to 3.02%, suggesting increased expenses or taxation. The EBIT margin reflects stability at around 4.3%, while the EBITDA margin is strong at 4.3%. The company has shown resilience in maintaining profitability despite industry challenges.85
Very Positive
Balance Sheet
The debt-to-equity ratio has improved significantly, moving from 1.64 to 0.82, reflecting better leverage management. Return on equity decreased from 22.28% to 17.64%, indicating a reduction in profit generation capability relative to shareholder equity. The equity ratio improved from 30.15% to 31.14%, suggesting a stable capital structure and reduced reliance on debt financing. The company has increased its equity base, enhancing financial stability.75
Positive
Cash Flow
Free cash flow growth is positive, rising from $718.3 million to $811.1 million, indicating strong cash generation capabilities. The operating cash flow to net income ratio is stable at approximately 1.28, suggesting effective conversion of earnings into cash. The free cash flow to net income ratio increased from 0.68 to 0.88, highlighting enhanced cash flow efficiency. Overall, the company maintains a healthy cash flow profile, crucial for sustaining operations and funding growth.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 30.46B | 29.53B | 27.81B | 25.55B | 20.44B | Gross Profit |
| 5.01B | 4.93B | 4.84B | 4.44B | 3.18B | EBIT |
| 1.32B | 1.35B | 1.49B | 1.36B | 704.50M | EBITDA |
| 1.68B | 1.79B | 1.62B | 1.48B | 820.00M | Net Income Common Stockholders |
| 918.90M | 1.05B | 1.38B | 1.19B | 543.60M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 72.40M | 96.40M | 106.50M | 100.70M | 49.50M | Total Assets |
| 16.72B | 15.67B | 14.11B | 13.46B | 13.25B | Total Debt |
| 4.24B | 7.74B | 6.95B | 6.40B | 7.18B | Net Debt |
| 4.17B | 7.64B | 6.85B | 6.30B | 7.13B | Total Liabilities |
| 11.49B | 10.92B | 9.94B | 9.37B | 9.92B | Stockholders Equity |
| 5.21B | 4.73B | 4.17B | 4.09B | 3.33B |
| Cash Flow | Free Cash Flow | |||
| 811.10M | 718.30M | 1.18B | 1.04B | 1.02B | Operating Cash Flow |
| 1.18B | 1.09B | 1.46B | 1.29B | 1.20B | Investing Cash Flow |
| -1.04B | -572.30M | -641.70M | -623.10M | -136.50M | Financing Cash Flow |
| -164.70M | -531.10M | -798.00M | -615.50M | -1.05B |
Penske Automotive Group Technical Analysis
Positive
169.20
Price Trends
161.52
Positive
159.60
Positive
156.62
Positive
Market Momentum
1.10
Positive
56.07
Neutral
68.02
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PAG, the sentiment is Positive. The current price of 169.2 is above the 20-day moving average (MA) of 166.98, above the 50-day MA of 161.52, and above the 200-day MA of 156.62, indicating a bullish trend. The MACD of 1.10 indicates Positive momentum. The RSI at 56.07 is Neutral, neither overbought nor oversold. The STOCH value of 68.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PAG.
Penske Automotive Group Risk Analysis
Penske Automotive Group disclosed 24 risk factors in its most recent earnings report. Penske Automotive Group reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Penske Automotive Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $11.13B | 12.14 | 18.50% | 2.66% | 3.14% | -11.22% | |
74 Outperform | $5.87B | 12.04 | 17.23% | 0.42% | 11.53% | -13.75% | |
73 Outperform | $8.21B | 10.55 | 12.47% | 0.67% | 16.75% | -18.09% | |
70 Outperform | $11.92B | 26.09 | 7.52% | ― | -2.46% | -6.19% | |
68 Neutral | $2.25B | 10.80 | 22.11% | 1.88% | -1.03% | 24.64% | |
63 Neutral | $6.71B | 10.10 | 29.65% | ― | -0.68% | -25.24% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% |
* Consumer Cyclical Sector Average
Performance Comparison
PAG
Penske Automotive Group
169.20
21.03
14.19%
AN
AutoNation
171.07
22.69
15.29%
KMX
CarMax
76.72
-4.41
-5.44%
GPI
Group 1 Automotive
441.25
178.25
67.78%
LAD
Lithia Motors
304.96
23.73
8.44%
SAH
Sonic Automotive
66.60
15.54
30.43%
Penske Automotive Group Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: 3.54% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance by Penske Automotive Group, with record revenue and profitability, strategic acquisitions, and a robust dividend increase. However, challenges remain in the used vehicle segment, BEV inventory management, and rental revenue due to external market conditions.Highlights
Record Revenue and Profitability
Penske Automotive Group achieved record revenue for 2024, increasing 3% to $30.5 billion, with a strong fourth quarter revenue increase of 6% to $7.7 billion. Earnings per share increased by 25% in Q4.
Dividend Increase
Announced the seventeenth consecutive quarterly dividend increase, a 3-cent rise to $1.22 per share, marking a 54% increase since the end of 2023.
Service and Parts Revenue Growth
Service and parts revenue increased 13% in Q4, with a 7% increase on a same-store basis, highlighting a strong focus on this business segment.
Technician Workforce Growth
Increased technician count by 7% in 2024, supporting the growth of service and parts business.
Successful Acquisitions
Completed acquisitions representing $2.1 billion in expected annualized revenue, expanding operations in the US, UK, and Australia.
Strong Balance Sheet and Cash Flow
Maintained strong cash flow with $1.2 billion generated from operations and $811 million in free cash flow for 2024.
Lowlights
Decrease in Used Vehicle Sales
Used units declined 6% in Q4 due to the disposal of three UK car shop locations, transitioning to Sytner Select.
BEV Inventory Challenges
BEVs require significant discounting, with an average discount of $6,900 per unit from MSRP in Q4.
Flat North American Class 8 Truck Sales
Sales were flat at 82,000 units in Q4 due to supply shortages and a prolonged freight recession.
Rental Revenue Decline
PTS rental revenue declined 9% in Q4 due to the ongoing freight recession impacting rental utilization.
Company Guidance
During the Penske Automotive Group's fourth-quarter 2024 earnings call, several key metrics were highlighted reflecting a strong performance and strategic growth. The company reported an increase in revenue by 6% to a record $7.7 billion, with earnings before taxes growing 23% to $315 million. Net income rose 24% to $236 million, resulting in earnings per share of $3.54, marking a 25% increase. The company delivered 491,000 new and used vehicles throughout the year, contributing to a 3% increase in total annual revenue, which reached $30.5 billion. The company also expanded through acquisitions amounting to $2.1 billion in expected annualized revenue. Service and parts revenue grew by 13% to $771 million, and the technician count increased by 7%. Despite a decline in used units, gross profit per used vehicle increased by $349 quarter over quarter. Penske maintained strong financial health with a debt capitalization ratio of 26.2% and a leverage ratio of 1.2x. Additionally, the quarterly dividend was raised for the seventeenth consecutive time, reflecting a 54% increase since the end of 2023.Penske Automotive Group Corporate Events
M&A TransactionsDividendsBusiness Operations and StrategyFinancial Disclosures
Penske Automotive Group Reports Record Q4 2024 Results
Positive
Feb 13, 2025
On February 13, 2025, Penske Automotive Group reported its fourth quarter and full-year 2024 financial results, highlighting a 6% increase in revenue to $7.7 billion for the quarter, setting a quarterly record. Net income attributable to common stockholders was $236.4 million, with earnings per share rising 25% to $3.54. The Board announced its 17th consecutive quarterly dividend increase, with a payout of $1.22 per share. The company also completed strategic acquisitions and divestitures, enhancing its market position and maintaining strong liquidity and leverage ratios.
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.