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Penske Automotive Group (PAG)
NYSE:PAG
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Penske Automotive Group
(NYSE:PAG)
77Outperform
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.
Inventory Management
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.
Negative Factors
Market Concerns
Overall concerns on increased pricing and supply chain disruption due to imposed tariffs on imported vehicles and parts.
Tariffs and Trade
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 (PAG) vs. S&P 500 (SPY)
Market Cap
$10.41B
Dividend Yield2.82%
Average Volume (3M)304.42K
Price to Earnings (P/E)11.5
Beta (1Y)0.69
Revenue Growth3.29%
EPS Growth-1.30%
CountryUS
Employees28,700
SectorConsumer Cyclical
Sector Strength59
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)13.74
Shares Outstanding66,747,190
10 Day Avg. Volume241,127
30 Day Avg. Volume304,416
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.78
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit3.69
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$170.00Price Target Upside8.04% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Penske Automotive Group Business Overview & Revenue Model
Company DescriptionPenske 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 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 a strong financial position with consistent revenue growth, solid profitability, effective leverage management, and robust cash flow generation. The income statement, balance sheet, and cash flow scores reflect these strengths, though 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.85
Very Positive
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.78
Positive
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.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 |
| 8.27B | 7.74B | 6.95B | 6.40B | 7.18B | Net Debt |
| 8.20B | 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
157.35
Price Trends
154.47
Positive
157.37
Negative
157.49
Negative
Market Momentum
1.49
Negative
57.32
Neutral
53.37
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 157.35 is above the 20-day moving average (MA) of 151.99, above the 50-day MA of 154.47, and below the 200-day MA of 157.49, indicating a neutral trend. The MACD of 1.49 indicates Negative momentum. The RSI at 57.32 is Neutral, neither overbought nor oversold. The STOCH value of 53.37 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 23 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $10.41B | 11.45 | 18.57% | 2.82% | 3.29% | -1.30% | |
74 Outperform | $6.49B | 9.75 | 28.45% | ― | -0.24% | -19.76% | |
74 Outperform | $4.37B | 10.58 | 11.92% | ― | 11.11% | -23.41% | |
73 Outperform | $7.72B | 9.34 | 12.95% | 0.71% | 12.96% | -6.25% | |
73 Outperform | $5.33B | 11.61 | 16.25% | 0.46% | 15.13% | -15.91% | |
61 Neutral | $6.65B | 11.71 | 3.09% | 3.98% | 2.65% | -20.82% | |
61 Neutral | $10.19B | 20.82 | 8.13% | ― | -0.69% | 6.27% |
* Consumer Cyclical Sector Average
Performance Comparison
PAG
Penske Automotive Group
157.35
7.59
5.07%
ABG
Asbury
222.33
0.73
0.33%
AN
AutoNation
176.76
10.32
6.20%
KMX
CarMax
66.71
-2.88
-4.14%
GPI
Group 1 Automotive
412.43
113.58
38.01%
LAD
Lithia Motors
296.50
36.03
13.83%
Penske Automotive Group Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: -0.15%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted record revenue and strong performance in service and parts, as well as positive growth in earnings per share. However, challenges were noted in the used automotive market, high BEV discounting, and potential tariff impacts. The overall sentiment balances positive and negative aspects.Q1-2025 Updates
Positive Updates
Record First Quarter Revenue
Revenue increased 2% to a record $7.6 billion, marking the seventh consecutive quarter of stable gross margin.
Strong Performance in Service and Parts
Service and parts revenue increased 6% to $789 million with a gross margin increase of 60 basis points to 58.6%.
Positive Earnings Per Share Growth
Earnings per share increased by 14% to $3.66, and adjusted earnings per share increased 6% to $3.39.
Increase in New Automotive Units
Delivered 120,000 new and used automotive units. New automotive units delivered increased 6% and 8% on a same-store basis.
SG&A Cost Control
On an adjusted basis, SG&A to gross profit declined by 70 basis points to 70.0%.
Improvement in BEV Inventory Management
Days' supply for BEVs improved to 56 days from 87 days in March last year.
Penske Transportation Solutions Growth
PTS earnings were up $3 million compared to the first quarter last year.
Negative Updates
Decline in Used Automotive Units
Used automotive units declined 16% and 11% on a same-store basis due to realignment of UK used-only dealerships.
High Discounting on BEV Sales
Average discount on BEVs from MSRP was over $7,400 during Q1.
Challenges in Logistics Revenue
PTS logistics revenue decreased 1%, and rental revenue declined 10% due to the freight recession.
Potential Impact of Tariffs
Freightliner is implementing a minimal price increase related to tariffs, with a surcharge of $3,000 on heavy-duty trucks.
Decline in Class 8 Truck Demand
The North American Class 8 market saw a 12% decline in Q1.
Company Guidance
In the Penske Automotive Group's first quarter 2025 earnings call, the company reported a 2% increase in revenue to a record $7.6 billion, with same-store retail automotive revenue up 2% and gross profit up 3%. Service and parts revenue increased by 6%, with gross margins improving 60 basis points to 58.6%. Earnings before taxes reached $337 million, while net income totaled $244 million, translating to earnings per share of $3.66, a 14% increase. On an adjusted basis, earnings before taxes rose 5% to $310 million, and net income was up 5% to $226 million, with adjusted earnings per share at $3.39, a 6% increase. The call highlighted a 70 basis point improvement in adjusted SG&A expenses as a percentage of gross profit and ongoing strategic efforts in inventory management and cost controls. The company also emphasized its diversified revenue streams, with 59% of revenue generated in North America, 31% in the UK, and 9% in other international markets.Penske Automotive Group Corporate Events
Business Operations and StrategyFinancial Disclosures
Penske Automotive Reports Record Q1 Revenue for 2025
Positive
Apr 30, 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.
Spark’s Take on PAG Stock
According to Spark, TipRanks’ AI Analyst, PAG is a Outperform.
Penske Automotive Group’s strong financial performance, attractive valuation, and positive earnings call sentiment contribute to a robust overall score. The company’s consistent revenue growth, efficient cost management, and strategic acquisitions bolster its position. However, technical indicators suggest caution due to potential short-term volatility. The stock’s overall score reflects its solid fundamentals and positive growth outlook, tempered by market conditions.
To see Spark’s full report on PAG stock, click here.
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.