Penske Automotive Group (PAG) AI Stock Analysis

• Market Cap: $10.65B
• Dividend Yield: 3.2%
• Average Volume (3M): 280.26K
• Price to Earnings (P/E): 11.4
• Beta (1Y): 0.73
• Revenue Growth: 2.25%
• EPS Growth: 8.92%
• Country: US
• Employees: 28,700
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Dealerships
• EPS (TTM): 3.25
• Shares Outstanding: 65,858,550
• 10 Day Avg. Volume: 228,418
• 30 Day Avg. Volume: 280,258
• PEG Ratio: -0.99
• Price to Book (P/B): 1.96
• Price to Sales (P/S): 0.33
• P/FCF Ratio: 12.57
• Enterprise Value/Market Cap: 1.83
• Enterprise Value/Revenue: 0.63
• Enterprise Value/Gross Profit: 3.83
• Enterprise Value/Ebitda: 11.36
• 1Y Price Target: $191.20
• Price Target Upside: 18.23% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 13.61
• Revenue Forecast (FY): $30.65B

• Rating: 68 Neutral
• Price Target: $175.00 ▲(8.21% Upside)

Penske Automotive Group's overall score is driven by strong financial performance and attractive valuation, which are offset by bearish technical indicators and mixed earnings call outcomes. The company's robust revenue growth and strategic expansions are significant strengths, while challenges in the UK and commercial truck sales present risks.

Positive Factors

Revenue Growth

The robust revenue growth indicates strong sales performance and market demand, supporting long-term business expansion and profitability.

Cash Flow Generation

Solid cash flow generation enhances financial stability, providing the company with resources to invest in growth opportunities and manage debt.

Strategic Expansion

Strategic expansions into new markets and brands strengthen market position and diversify revenue streams, supporting long-term growth.

Negative Factors

Challenges in UK Operations

Operational disruptions in the UK due to cyber incidents can affect revenue and customer trust, posing risks to international operations.

Decline in Commercial Truck Sales

A decline in commercial truck sales indicates challenges in the freight environment, potentially impacting revenue and profit margins.

Increased SG&A Costs

Rising SG&A costs can pressure margins and reduce profitability, necessitating efficiency improvements to maintain financial health.

Penske Automotive Group Business Overview & Revenue Model

Company Description

Penske Automotive Group, Inc., a diversified transportation services company, operates automotive and commercial truck dealerships. The company operates through four segments: Retail Automotive, Retail Commercial Truck, Other, and Non-Automotive Investments. It operates dealerships under franchise agreements with various automotive manufacturers and distributors. The company engages in the sale of new and used motor vehicles, and related products and services comprise vehicle and collision repair services, as well as placement of finance and lease contracts, third-party insurance products, and other aftermarket products; and wholesale of parts. It also operates a heavy and medium duty truck dealership, which offers Freightliner and Western Star branded trucks, as well as a range of used trucks, and maintenance and repair services. In addition, it imports and distributes Western Star heavy-duty trucks, MAN heavy and medium duty trucks, buses, and Dennis Eagle refuse collection vehicles with associated parts in Australia, New Zealand, and portions of the Pacific. Further, the company distributes diesel and gas engines, and power systems. The company operates 320 retail automotive franchises, including 146 franchises located in the United States and 174 franchises located outside of the United States; 23 CarShop used vehicle dealerships in the United States and the United Kingdom; and 37 commercial truck dealerships in Texas, Oklahoma, Tennessee, Georgia, Utah, Idaho, Kansas, Missouri, and Oregon, as well as Canada. Penske Automotive Group, Inc. was incorporated in 1990 and is headquartered in Bloomfield Hills, Michigan.

How the Company Makes Money

Penske 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 Financial Statement Overview

Summary

Penske Automotive Group demonstrates strong revenue growth and improved profitability, with a significant reduction in leverage. The company shows solid cash flow generation, supporting 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.

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.

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.

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

• Technical Analysis Sentiment: Neutral
• Last Price: 161.72
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 161.72 is above the 20-day moving average (MA) of 158.03, below the 50-day MA of 164.34, and below the 200-day MA of 164.17, indicating a neutral trend. The MACD of -0.93 indicates Negative momentum. The RSI at 51.91 is Neutral, neither overbought nor oversold. The STOCH value of 78.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PAG.

Penske Automotive Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LAD	69 Neutral	$7.73B	9.22	13.44%	0.68%	8.56%	17.84%
PAG	68 Neutral	$10.65B	11.39	17.30%	3.20%	2.25%	8.92%
ABG	67 Neutral	$4.52B	8.16	15.49%	―	8.07%	60.95%
GPI	66 Neutral	$5.07B	14.11	12.27%	0.50%	19.45%	-24.27%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
KMX	59 Neutral	$5.61B	11.22	8.42%	―	2.17%	28.59%
AN	55 Neutral	$7.71B	12.43	27.16%	―	6.06%	-1.71%

Penske Automotive Group Corporate Events

Penske Automotive’s Earnings Call: Mixed Sentiment with Growth and Challenges

The recent earnings call for Penske Automotive painted a mixed picture of the company’s performance. While there was strong growth in U.S. automotive sales and international operations, as well as strategic expansions and dividend increases, these positive aspects were tempered by challenges such as cyber incidents impacting the UK market, declines in commercial truck sales, and increased costs in the UK. Additionally, the freight environment posed challenges, leading to declines in revenue for Penske Truck Leasing (PTS) and increased bad debt expenses.

Penske Automotive Reports Mixed Quarterly Results

Looking forward, Penske Automotive Group remains focused on navigating challenges in the North American freight market and the U.K. auto retail sector. The company continues to prioritize strategic growth through acquisitions and maintaining strong financial health, as evidenced by its recent debt repayment and share repurchase activities. Management remains cautiously optimistic about future performance, despite ongoing market uncertainties.

Penske Automotive Group Reports Q3 2025 Financial Results

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%.

The most recent analyst rating on (PAG) stock is a Hold with a $190.00 price target. To see the full list of analyst forecasts on Penske Automotive Group stock, see the PAG Stock Forecast page.

Penske Automotive’s Earnings Call Highlights Resilience and Growth

The recent earnings call for Penske Automotive presented a generally positive outlook, highlighting consistent revenue performance and growth in key financial metrics. Despite facing challenges in specific segments and markets, the company demonstrated resilience and adaptability, maintaining a steady course towards its financial goals.

Penske Automotive Reports Strong Quarterly Earnings

Penske Automotive Group, Inc., headquartered in Bloomfield Hills, Michigan, is a diversified international transportation services company and a leading automotive and commercial truck retailer with operations across the United States, the United Kingdom, Canada, Germany, Italy, Japan, and Australia.