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Penske Automotive Group (PAG)
NYSE:PAG
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Penske Automotive Group
(NYSE:PAG)
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Rating:71Outperform
Price Target:
$182.00
▲(9.47% Upside)
Penske Automotive Group's strong financial performance, highlighted by robust revenue growth and improved profitability, is the most significant factor driving its stock score. The recent dealership acquisition further strengthens its market position. However, technical indicators suggest caution due to potential overbought conditions, and challenges highlighted in the earnings call, such as cyber incidents and declining truck sales, present risks.
Positive Factors
Strategic Expansion
This acquisition is expected to add $1.5 billion in annualized revenue, enhancing market presence and strengthening relationships with Toyota and Lexus.
Revenue Growth
Consistent revenue growth demonstrates robust sales performance and market expansion, supporting long-term profitability.
Cash Flow Generation
Strong cash flow generation supports financial stability and provides flexibility for strategic investments and debt reduction.
Negative Factors
Challenges in UK Retail Automotive
Cyber incidents can disrupt operations and erode customer trust, potentially impacting long-term revenue and profitability in affected regions.
Decline in Commercial Truck Sales
A decline in commercial truck sales indicates vulnerability to freight market conditions, affecting revenue and profitability in this segment.
Increased SG&A Costs in the UK
Rising SG&A costs can pressure margins and reduce profitability, challenging cost management and operational efficiency.
Penske Automotive Group (PAG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.95B
Dividend Yield3.12%
Average Volume (3M)224.35K
Price to Earnings (P/E)11.7
Beta (1Y)0.69
Revenue Growth2.25%
EPS Growth8.92%
CountryUS
Employees28,700
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)3.25
Shares Outstanding65,858,550
10 Day Avg. Volume249,532
30 Day Avg. Volume224,351
Financial Highlights & Ratios
PEG Ratio-0.99
Price to Book (P/B)1.96
Price to Sales (P/S)0.33
P/FCF Ratio12.57
Enterprise Value/Market Cap1.78
Enterprise Value/Revenue0.63
Enterprise Value/Gross Profit3.83
Enterprise Value/Ebitda11.36
Forecast
1Y Price Target
$190.17Price Target Upside14.39% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)13.64
Revenue Forecast (FY)$30.65B
Penske Automotive Group Business Overview & Revenue Model
Company DescriptionPenske Automotive Group, Inc. is a diversified international transportation services company headquartered in Bloomfield Township, Michigan. The company operates in the retail automotive sector, primarily engaged in the sale of new and used vehicles, along with providing associated services such as vehicle maintenance and repair. PAG also operates in the logistics and transportation sector, offering services through its subsidiaries, and is involved in the retail of commercial vehicles and parts. As a key player in the automotive retail industry, Penske Automotive Group represents various prestigious automotive brands across North America and the United Kingdom.
How the Company Makes MoneyPenske Automotive Group generates revenue through multiple streams primarily focused on automotive retail. The main revenue sources include the sale of new and used vehicles, which accounts for a significant portion of its earnings. Additionally, the company earns money from service and parts sales, which provide ongoing revenue from vehicle maintenance and repairs. PAG also benefits from financing and insurance products provided to customers at the point of sale. The company has established partnerships with major automotive manufacturers, allowing it to offer a wide range of vehicles, which enhances its market presence. Furthermore, PAG's expansion into logistics and transportation services contributes to its overall revenue model, supporting its growth and profitability in a competitive market.
Penske Automotive Group Earnings Call Summary
Earnings Call Date:Oct 29, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 11, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong growth in U.S. automotive sales and international operations, as well as strategic expansions and dividend increases. However, these positive aspects were offset by challenges such as cyber incidents impacting the UK market, declines in commercial truck sales, and increased costs in the UK. The freight environment also posed challenges, leading to declines in revenue for PTS and increased bad debt expenses.Q3-2025 Updates
Positive Updates
Increase in U.S. Automotive Sales
U.S. automotive retail business saw a strong performance with same-store new units delivered increasing by 9% and revenue increasing by $300 million or nearly 10%.
Growth in BEV Sales
The penetration of BEV sales increased to more than 10% of total sales, up from 6% to 7% in previous quarters.
Strong International Revenue Growth
Operations in Italy, Germany, and Japan generated an increase in revenue of 23% and an EBT increase of 54% during Q3.
Increase in Dividend
Dividend increased by 4.5% to $1.38 per share in October, marking the 20th consecutive quarterly increase.
Successful Strategic Expansion
Acquisition of a Ferrari dealership in Modena, Italy, and the opening of new Chinese brand locations in the UK and Germany.
Negative Updates
Challenges in UK Retail Automotive
A cyber incident at Land Rover impacted delivery of new vehicles and service operations, reducing gross per unit by approximately $61.
Decline in Commercial Truck Sales
PTG same-store unit sales declined by 19% and EBT declined by $15 million due to a challenging freight backdrop.
Increased SG&A Costs in the UK
Higher costs for government-mandated social programs drove up SG&A costs, contributing to a reduction in EBT by approximately $5 million.
Impact of Freight Environment on PTS
PTS operating revenue declined by 3% to $2.7 billion, with rental revenue declining by 14% due to the freight environment.
Increased Bad Debt Expense
PTS incurred an increase in bad debt expense on its rental business of approximately $7.5 million, impacting the PAG equity income by approximately $2.2 million.
Company Guidance
During the Penske Automotive Group's third-quarter 2025 earnings call, several key metrics and business dynamics were discussed. The company reported a Q3 revenue of $7.7 billion, a 1% increase, with earnings before tax (EBT) of $292 million and a net income of $213 million, translating to earnings per share of $3.23. The retail automotive same-store revenue grew by 5%, driven by a 5% increase in service and parts revenue. Despite challenges including dealership closures and strategic divestitures, the company achieved a higher penetration of battery electric vehicle (BEV) sales, which constituted over 10% of total sales, a rise from 6%-7% in earlier quarters. The average discount on BEV sales in the U.S. was $7,100, impacting the total new vehicle gross per unit by approximately $100. In the U.S., same-store new units delivered increased by 9%, adding $300 million in revenue, while the UK operations faced a 7% decline in same-store units delivered due to various macroeconomic factors and a cyber incident affecting Land Rover. The U.S. operations experienced a 6% increase in same-store service and parts revenue, contributing to a record level of gross profit. Premier Truck Group, however, saw a 19% decline in same-store unit sales, with EBT declining by $15 million amid a challenging freight environment. The company maintained a robust balance sheet, with adjusted EBITDA at $357 million for the quarter and a trailing 12-month figure of over $1.5 billion. Additionally, the company reduced its non-vehicle long-term debt and maintained a leverage ratio of 1.0x. The quarter also saw strategic capital allocation, including the acquisition of a Ferrari dealership in Modena, Italy, and plans for further revenue growth with an acquisition pipeline expected to close in Q4.Penske Automotive Group Financial Statement Overview
Summary
Penske Automotive Group exhibits strong revenue growth and improved profitability, with a significant reduction in leverage. The company demonstrates solid cash flow generation, supporting its financial stability. However, there is room for improvement in operating efficiency and further strengthening of the equity base.Income Statement
Penske Automotive Group shows strong revenue growth with a TTM growth rate of 34.2%, indicating robust sales performance. The gross profit margin is stable at around 16.5%, and the net profit margin has improved to 6.35% in the TTM, reflecting enhanced profitability. However, EBIT and EBITDA margins have slightly decreased, suggesting some pressure on operating efficiency.78
Positive
Balance Sheet
The company's debt-to-equity ratio has significantly improved to 0.03 in the TTM, indicating reduced leverage and a stronger equity position. Return on equity remains healthy at 20.97%, showcasing effective use of shareholder funds. However, the equity ratio is low, suggesting a high reliance on debt financing historically.65
Positive
Cash Flow
Penske Automotive Group's free cash flow has grown by 5.18% in the TTM, demonstrating solid cash generation. The operating cash flow to net income ratio is strong at 1.41, indicating good cash conversion. The free cash flow to net income ratio is also healthy at 0.69, reflecting efficient cash management.72
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 30.68B | 30.46B | 29.53B | 27.81B | 25.55B | 20.44B |
| Gross Profit | 5.08B | 5.01B | 4.93B | 4.84B | 4.44B | 3.18B |
| EBITDA | 1.71B | 1.68B | 1.79B | 2.11B | 1.82B | 980.40M |
| Net Income | 943.70M | 918.90M | 1.05B | 1.38B | 1.19B | 543.60M |
Balance Sheet | ||||||
| Total Assets | 17.12B | 16.72B | 15.67B | 14.11B | 13.46B | 13.25B |
| Cash, Cash Equivalents and Short-Term Investments | 80.30M | 72.40M | 96.40M | 106.50M | 100.70M | 49.50M |
| Total Debt | 3.96B | 8.27B | 7.74B | 6.95B | 6.40B | 7.18B |
| Total Liabilities | 11.39B | 11.49B | 10.92B | 9.94B | 9.37B | 9.92B |
| Stockholders Equity | 5.71B | 5.21B | 4.73B | 4.15B | 4.07B | 3.30B |
Cash Flow | ||||||
| Free Cash Flow | 757.00M | 811.10M | 718.30M | 1.18B | 1.04B | 1.02B |
| Operating Cash Flow | 1.07B | 1.18B | 1.09B | 1.46B | 1.29B | 1.20B |
| Investing Cash Flow | -269.80M | -1.04B | -572.30M | -641.70M | -623.10M | -136.50M |
| Financing Cash Flow | -815.40M | -164.70M | -531.10M | -798.00M | -615.50M | -1.05B |
Penske Automotive Group Technical Analysis
Neutral
166.25
Price Trends
162.75
Positive
169.79
Negative
164.34
Positive
Market Momentum
1.64
Negative
54.82
Neutral
37.63
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PAG, the sentiment is Neutral. The current price of 166.25 is above the 20-day moving average (MA) of 164.70, above the 50-day MA of 162.75, and above the 200-day MA of 164.34, indicating a bullish trend. The MACD of 1.64 indicates Negative momentum. The RSI at 54.82 is Neutral, neither overbought nor oversold. The STOCH value of 37.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $8.34B | 9.95 | 13.44% | 0.63% | 8.56% | 17.84% | |
73 Outperform | $5.12B | 14.26 | 12.27% | 0.49% | 19.45% | -24.27% | |
71 Outperform | $10.95B | 11.71 | 17.30% | 3.12% | 2.25% | 8.92% | |
70 Neutral | $7.53B | 12.30 | 27.16% | ― | 6.06% | -1.71% | |
67 Neutral | $4.61B | 8.31 | 15.49% | ― | 8.07% | 60.95% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $5.65B | 12.72 | 7.46% | ― | -1.49% | 2.78% |
* Consumer Cyclical Sector Average
PAG
Penske Automotive Group
166.25
15.43
10.23%
ABG
Asbury
236.90
-6.88
-2.82%
AN
AutoNation
209.12
37.92
22.15%
KMX
CarMax
38.47
-45.23
-54.04%
GPI
Group 1 Automotive
405.21
-11.33
-2.72%
LAD
Lithia Motors
343.89
-13.70
-3.83%
Penske Automotive Group Corporate Events
M&A TransactionsBusiness Operations and Strategy
Penske Automotive Group Expands with Major Dealership Acquisition
Positive
Nov 19, 2025
On November 19, 2025, Penske Automotive Group announced the acquisition of four franchised automotive dealerships, including Longo Toyota and Longo Lexus in California, and Longo Toyota of Prosper in Texas. This strategic acquisition, completed through a Membership Interests Purchase Agreement, is expected to add $1.5 billion in estimated annualized revenue and enhance Penske’s presence in the California and Texas markets. The purchase was funded through a combination of existing credit and a note payable to the seller. The transaction is anticipated to strengthen Penske’s relationship with Toyota and Lexus brands, expanding its operations and market reach.
M&A TransactionsStock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures
Penske Automotive Group Reports Q3 2025 Financial Results
Neutral
Oct 29, 2025
Penske Automotive Group reported its third-quarter 2025 results, showing a 1.4% increase in revenue to $7.7 billion compared to the same period in 2024. Despite growth in retail automotive service and parts revenue, net income attributable to common stockholders decreased by 6% due to challenges in the North American freight market and the U.K. auto retail market. The company repurchased 1.6% of its outstanding shares and repaid $550 million in senior subordinated notes, maintaining a leverage ratio of 1.0x. Additionally, Penske completed the acquisition of a Ferrari dealership in Italy and increased its quarterly dividend by 4.5%.
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.