Penske Automotive Group (PAG) AI Stock Analysis

• Market Cap: $11.32B
• Dividend Yield: 2.77%
• Average Volume (3M): 251.13K
• Price to Earnings (P/E): 12.1
• Beta (1Y): 0.70
• Revenue Growth: 3.29%
• EPS Growth: -1.29%
• Country: US
• Employees: 28,700
• Sector: Consumer Cyclical
• Sector Strength: 68
• Industry: Auto - Dealerships
• EPS (TTM): 3.39
• Shares Outstanding: 66,168,440
• 10 Day Avg. Volume: 215,784
• 30 Day Avg. Volume: 251,133
• PEG Ratio: 3.68
• Price to Book (P/B): 2.12
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 24.38
• Enterprise Value/Market Cap: 1.35
• Enterprise Value/Revenue: 0.13
• Enterprise Value/Gross Profit: 3.04
• Enterprise Value/Ebitda: 2.44
• 1Y Price Target: $185.00
• Price Target Upside: 8.17% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

• Rating: 76 Outperform
• Price Target: $193.00 ▲(12.85%Upside)

Penske Automotive Group's strong financial performance and strategic earnings improvements drive a solid score. While technical indicators are neutral, the stock's valuation remains attractive. Earnings call insights highlight growth and challenges, balancing the overall sentiment.

Positive Factors

Capital Allocation

Penske's capital allocation and diversification efforts are major positives, supported by strong free cash flow and low adjusted net leverage.

Financial Performance

Penske Automotive reported results that beat consensus estimates, leading to an increase in sales, EBITDA, and EPS estimates for future years.

Operational Efficiency

Penske continues to demonstrate strong fixed operations with efficiency gains per technician and technician growth.

Negative Factors

Market Pricing Concerns

Concerns arise as the market anticipates increased pricing due to strong March SAAR suggesting pulled-forward demand ahead of expected price hikes.

Tariffs and Supply Chain

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 primarily through the sale of new and used vehicles, which constitutes the largest portion of its income. In addition to vehicle sales, the company earns money from finance and insurance products related to vehicle purchases, such as extended service contracts and vehicle protection plans. PAG also derives revenue from service and parts operations, offering maintenance, repair, and customization services. The company benefits from strategic partnerships with major automotive brands and financial institutions, enhancing its ability to provide competitive financing options and a broad inventory of vehicles. Furthermore, PAG's commercial truck operations add another revenue stream, selling and leasing commercial vehicles and providing related services.

Penske Automotive Group Financial Statement Overview

Summary

Penske Automotive Group shows a strong financial position with consistent revenue growth and solid profitability, highlighted by a robust cash flow and an effective capital structure. However, maintaining margins amidst market fluctuations is crucial.

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	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
EBITDA	1.68B	1.65B	2.06B	1.80B	942.70M
Net Income	918.90M	1.05B	1.38B	1.19B	543.60M
Balance Sheet
Total Assets	16.72B	15.67B	14.11B	13.46B	13.25B
Cash, Cash Equivalents and Short-Term Investments	72.40M	96.40M	106.50M	100.70M	49.50M
Total Debt	8.27B	7.74B	6.95B	6.40B	7.18B
Total Liabilities	11.49B	10.92B	9.94B	9.37B	9.92B
Stockholders Equity	5.21B	4.73B	4.15B	4.07B	3.30B
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

• Technical Analysis Sentiment: Positive
• Last Price: 171.03
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 171.03 is below the 20-day moving average (MA) of 176.23, above the 50-day MA of 169.64, and above the 200-day MA of 159.26, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 47.27 is Neutral, neither overbought nor oversold. The STOCH value of 18.56 is Positive, 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	76 Outperform	$11.32B	12.05	18.57%	2.77%	3.29%	-1.29%
ABG	74 Outperform	$4.60B	11.13	11.92%	―	11.11%	-23.41%
AN	71 Outperform	$7.61B	11.94	28.45%	―	-0.24%	-19.76%
GPI	71 Outperform	$5.36B	11.68	16.25%	0.58%	15.13%	-15.98%
LAD	67 Neutral	$8.01B	9.70	12.95%	0.85%	12.96%	-6.25%
KMX	66 Neutral	$9.53B	17.57	8.97%	―	3.17%	42.14%
Sector *	63 Neutral	$17.14B	11.11	-7.24%	3.14%	1.68%	-25.43%

Penske Automotive Group Corporate Events

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.

Penske Automotive Reports Record Q1 Revenue for 2025

Penske Automotive Group reported a record first-quarter revenue of $7.6 billion for 2025, marking a 2% increase from the previous year. The company saw a 14% rise in net income attributable to common stockholders, reaching $244.3 million, with earnings per share also increasing by 14% to $3.66. Despite challenges such as a negative impact from foreign currency exchange, the company benefited from a diversified business model and improved gross profit margins in its retail automotive service and parts segment. The company continues to monitor the impact of tariffs and remains flexible in adapting to changes in the automotive landscape.