Penske Automotive Group (PAG) AI Stock Analysis

• Market Cap: $11.95B
• Dividend Yield: 2.73%
• Average Volume (3M): 230.38K
• Price to Earnings (P/E): 12.6
• Beta (1Y): 0.77
• Revenue Growth: 2.39%
• EPS Growth: 5.84%
• Country: US
• Employees: 28,700
• Sector: Consumer Cyclical
• Sector Strength: 75
• Industry: Auto - Dealerships
• EPS (TTM): 3.78
• Shares Outstanding: 66,044,370
• 10 Day Avg. Volume: 252,505
• 30 Day Avg. Volume: 230,376
• 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: 1.65
• Enterprise Value/Revenue: 0.65
• Enterprise Value/Gross Profit: 3.92
• Enterprise Value/Ebitda: 12.79
• 1Y Price Target: $192.67
• Price Target Upside: 5.25% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 77 Outperform
• Price Target: $201.00 ▲(9.80% Upside)

Penske Automotive Group's strong financial performance and positive earnings call are the most significant factors driving the stock score. The company's strategic acquisitions and shareholder-friendly initiatives further enhance its appeal. Technical indicators suggest a positive long-term trend, though short-term momentum is mixed.

Positive Factors

Capital Allocation

PAG combines low leverage, high liquidity, and strong cash flow with disciplined capital allocation, a growing dividend, active buybacks, and a healthy M&A pipeline.

Financial Performance

PAG's diversified model remains a strength, with solid cost discipline driving profitability gains.

Negative Factors

Market Challenges

UK results were weighed down by softness in the luxury market, EV mandates, tariff uncertainty, reduced incentives, and OEM production shifts.

Tariff Impact

The U.S. imposed a 25% tariff on imported vehicles and parts, prompting responses like order halts and plant shutdowns from Nissan, Stellantis, Mercedes and Volkswagen, and causing overall concerns on increased pricing and supply chain disruption.

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 within its automotive retail operations. The majority of its income comes from the sale of new and used vehicles, which includes significant contributions from finance and insurance products offered to customers at the point of sale. Additionally, PAG earns revenue from service and parts sales, which provide a steady income stream through maintenance and repair services. The company's business model is further bolstered by its leasing operations and the sale of aftermarket products. Strategic partnerships with automobile manufacturers and financial institutions also enhance its revenue-generating capabilities, allowing for competitive financing options and promotions that attract customers. Furthermore, PAG benefits from economies of scale due to its extensive network of dealerships, enabling cost efficiencies that improve profitability.

Penske Automotive Group Financial Statement Overview

Summary

Penske Automotive Group shows consistent revenue growth and strong profitability with a TTM revenue of $30.61 billion and a net profit margin of 3.1%. The balance sheet is robust with a healthy debt-to-equity ratio of 0.77, while cash flows remain solid with a $971 million operating cash flow.

Income Statement

Penske Automotive Group has demonstrated consistent revenue growth with a TTM revenue of $30.61 billion, up from $30.46 billion annually. The gross profit margin stands at 16.45%, and the net profit margin is 3.1%, indicating strong profitability. Although EBIT margin decreased slightly to 4.26%, the company's ability to maintain solid margins in a competitive industry is commendable.

Balance Sheet

The balance sheet reflects a strong equity position with a debt-to-equity ratio of 0.77, indicating manageable leverage. The equity ratio is 31.85%, showcasing a solid capital structure. Return on equity is 17.57%, highlighting effective use of shareholder funds despite a high debt load.

Cash Flow

The cash flow statement shows robust operating cash flow at $971 million with a free cash flow of $464 million. The company maintains a healthy free cash flow to net income ratio of 0.49, indicating efficient cash generation relative to net income despite a decrease in free cash flow growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	30.61B	30.46B	29.53B	27.81B	25.55B	20.44B
Gross Profit	5.04B	5.01B	4.93B	4.84B	4.44B	3.18B
EBITDA	1.54B	1.68B	1.65B	2.06B	1.80B	942.70M
Net Income	948.00M	918.90M	1.05B	1.38B	1.19B	543.60M
Balance Sheet
Total Assets	16.93B	16.72B	15.67B	14.11B	13.46B	13.25B
Cash, Cash Equivalents and Short-Term Investments	118.40M	72.40M	96.40M	106.50M	100.70M	49.50M
Total Debt	8.10B	8.27B	7.74B	6.95B	6.40B	7.18B
Total Liabilities	11.52B	11.49B	10.92B	9.94B	9.37B	9.92B
Stockholders Equity	5.39B	5.21B	4.73B	4.15B	4.07B	3.30B
Cash Flow
Free Cash Flow	736.70M	811.10M	718.30M	1.18B	1.04B	1.02B
Operating Cash Flow	1.08B	1.18B	1.09B	1.46B	1.29B	1.20B
Investing Cash Flow	-681.10M	-1.04B	-572.30M	-641.70M	-623.10M	-136.50M
Financing Cash Flow	-361.90M	-164.70M	-531.10M	-798.00M	-615.50M	-1.05B

Penske Automotive Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 183.06
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 183.06 is above the 20-day moving average (MA) of 172.13, above the 50-day MA of 173.03, and above the 200-day MA of 161.00, indicating a bullish trend. The MACD of 1.96 indicates Negative momentum. The RSI at 66.21 is Neutral, neither overbought nor oversold. The STOCH value of 89.66 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PAG.

Penske Automotive Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAG	77 Outperform	$11.95B	12.60	18.11%	2.73%	2.39%	5.84%
GPI	76 Outperform	$5.75B	12.31	15.72%	0.43%	19.75%	-10.74%
ABG	76 Outperform	$4.60B	8.88	15.19%	―	8.39%	40.35%
LAD	75 Outperform	$7.71B	8.91	13.34%	0.70%	10.25%	9.08%
AN	69 Neutral	$7.74B	13.24	27.24%	―	3.15%	-12.49%
KMX	65 Neutral	$8.50B	16.21	8.97%	―	3.17%	42.14%
Sector *	63 Neutral	£1.73B	10.49	4.37%	3.49%	0.66%	-39.52%

Penske Automotive Group Corporate Events

Penske Automotive Reports Strong Q2 2025 Financial Results

Penske Automotive Group reported its second quarter 2025 financial results, highlighting a 3% increase in record gross profit to $1.3 billion and a 4% rise in earnings before taxes to $337 million. Despite flat revenue at $7.7 billion, the company saw a 4% increase in net income attributable to common stockholders, driven by improved gross margins and a strong performance in the retail automotive service and parts sector. The company also repurchased 885,000 shares year-to-date and completed the acquisition of a Ferrari dealership in Italy, reflecting its strategic focus on premium brand mix and geographic diversification.

The most recent analyst rating on (PAG) stock is a Buy with a $195.00 price target. To see the full list of analyst forecasts on Penske Automotive Group stock, see the PAG Stock Forecast page.

Penske Automotive Amends Services Agreement with Mitsui

On May 14, 2025, Penske Automotive Group announced an amended services agreement with Mitsui & Co (U.S.A.), Inc., involving strategic development in transportation industries and new technology evaluation. The agreement includes a quarterly fee and a stockholders agreement ensuring board representation for Mitsui based on its stock ownership. Additionally, Penske Automotive’s Board approved a 3.3% increase in quarterly dividends to $1.26 per share and expanded securities repurchase authorization by $250 million, reflecting the company’s ongoing financial growth and commitment to shareholder returns.

The most recent analyst rating on (PAG) stock is a Buy with a $195.00 price target. To see the full list of analyst forecasts on Penske Automotive Group stock, see the PAG Stock Forecast page.