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Sonic Automotive
(NYSE:SAH)
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Rating:56Neutral
Price Target:
$103.00
▲(3.19% Upside)
Action:Reiterated
Date:07/31/26
The score is held back primarily by weaker financial quality—high leverage and a recent swing to negative free cash flow—despite strong revenue momentum. Technicals are a notable positive with price trending above key moving averages. Valuation is a secondary headwind due to a high P/E and only modest yield, while the latest earnings call provided supportive guidance and growth initiatives but acknowledged ongoing margin pressure.
Positive Factors
Diversified business model and record results
Sonic's multi‑channel model (franchised dealerships, EchoPark, powersports, parts/service, F&I) produced record revenue and gross profit. That diversification reduces reliance on any single OEM cycle and supports more stable top-line and gross-profit generation over the next several months.
Negative Factors
Elevated leverage and limited equity cushion
High debt relative to equity limits financial flexibility in a cyclical auto retail environment. Elevated leverage makes Sonic more sensitive to interest rates, inventory funding costs, and downturns, constraining capacity for opportunistic M&A or cushioning margin shocks over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Diversified business model and record results
Sonic's multi‑channel model (franchised dealerships, EchoPark, powersports, parts/service, F&I) produced record revenue and gross profit. That diversification reduces reliance on any single OEM cycle and supports more stable top-line and gross-profit generation over the next several months.
Read all positive factors
Sonic Automotive Key Performance Indicators (KPIs)
Any
Operating Income by Segment
Shows segment-level profitability after operating costs like salaries, facility expenses, and marketing. Indicates which parts of the dealership network truly generate operating cash and where management may need to cut costs or invest to improve returns.
Shows segment-level profitability after operating costs like salaries, facility expenses, and marketing. Indicates which parts of the dealership network truly generate operating cash and where management may need to cut costs or invest to improve returns.
Data provided by:
The Fly
The FlySonic Automotive (SAH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.89B
Dividend Yield1.69%
Average Volume (3M)201.34K
Price to Earnings (P/E)14.4
Beta (1Y)0.91
Revenue Growth5.25%
EPS Growth37.36%
CountryUS
Employees11,000
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)6.38
Shares Outstanding19,574,728
10 Day Avg. Volume225,503
30 Day Avg. Volume201,338
Financial Highlights & Ratios
PEG Ratio-0.40
Price to Book (P/B)1.97
Price to Sales (P/S)0.14
P/FCF Ratio5.04
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$100.13Price Target Upside0.31% Upside
Rating ConsensusHold
Number of Analyst Covering9
EPS Forecast (FY)6.89
Revenue Forecast (FY)$15.69B
Sonic Automotive Business Overview & Revenue Model
Company Description
Sonic Automotive, Inc. operates as a significant automotive retailer across the United States, structuring its diverse business activities into two primary divisions: Franchised Dealerships and EchoPark. The Franchised Dealerships segment is respo...
How the Company Makes Money
Sonic Automotive primarily makes money by retailing vehicles and providing higher-margin after-sale products and services. Key revenue streams include: (1) New vehicle sales: revenue from selling new cars and trucks through franchised dealerships;...
Sonic Automotive Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call contained multiple strong operational and financial highlights — record company revenue and gross profit, robust EchoPark and Powersports growth, improved guidance for new GPU, solid liquidity and dividend authorization, and an active M&A pipeline. Offsetting these positives were margin pressures across new and used GPUs, EchoPark per-unit declines driven by mix shifts (BEVs and higher-mileage vehicles), a moderation in fixed operations growth, and short-term marketing timing and regulatory/competitive pricing noise. Management emphasized strategic responses (pricing optimization, inventory sourcing, F&I product work, targeted marketing) and remains constructive about growth prospects.Positive Updates
Record Total Revenue and Quarterly Gross Profit
Total revenues of $3.9 billion, up 8% year-over-year, and all-time record quarterly gross profit of $616.2 million, up 2% year-over-year.
Negative Updates
Compression in New Vehicle GPU
Reported Q2 new vehicle GPU was $3,020 per unit, down 11% year-over-year; same-store new vehicle GPU was $2,870, down 16% year-over-year. Management cites prior-year pre-tariff GPU strength and expects potential GPU compression in 3Q/4Q due to affordability pressures.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Total Revenue and Quarterly Gross Profit
Total revenues of $3.9 billion, up 8% year-over-year, and all-time record quarterly gross profit of $616.2 million, up 2% year-over-year.
Read all positive updates
Company Guidance
Sonic provided several forward-looking targets: it raised full‑year new‑vehicle GPU to $2.85k–$3.00k (Q2 new GPU $3.02k; same‑store $2.87k) and said new GPU is tracking above the high end of guidance, while used GPU is tracking at the high end of prior guidance of $13.50–$14.50 (Q2 used GPU $13.99; same‑store $14.01) and same‑store used retail volume is up 7%; fixed operations is expected to deliver mid‑single‑digit same‑store gross profit growth (Q2 fixed ops gross profit $263.8M, +6%; same‑store +2%) and F&I remains a core contributor (Q2 franchise F&I gross profit $147.9M). EchoPark full‑year targets are total GPU $3.1k–$3.3k per unit and 12%–15% used retail unit growth (Q2 EchoPark revs $582.9M; retail volume 19.6k, +17%); EchoPark adjusted EBITDA guide is $35M–$40M (Q2 adj. EBITDA $13.9M) and includes $8M–$12M of incremental Q4 brand marketing (initial branding budget $20M, timing shifted); management expects to open 1 EchoPark in Orlando in Q4 and 2–4 in 2027. Balance‑sheet guidance/targets: ~ $676M total available liquidity (incl. ~$294M cash and floor‑plan deposits) and the Board approved a $0.41/share cash dividend payable Oct 15, 2026 (record Sep 15).Sonic Automotive Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
44
Neutral
Cash Flow
38
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 15.47B | 15.15B | 14.22B | 14.37B | 14.00B | 12.40B |
| Gross Profit | 2.43B | 2.38B | 2.19B | 2.25B | 2.32B | 1.91B |
| EBITDA | 665.90M | 525.30M | 605.10M | 566.00M | 441.70M | 619.20M |
| Net Income | 211.90M | 118.70M | 216.00M | 178.20M | 88.50M | 348.90M |
Balance Sheet | ||||||
| Total Assets | 6.38B | 5.97B | 5.90B | 5.36B | 4.98B | 4.98B |
| Cash, Cash Equivalents and Short-Term Investments | 19.20M | 6.30M | 44.00M | 28.90M | 229.20M | 299.40M |
| Total Debt | 4.67B | 4.23B | 4.13B | 3.86B | 3.49B | 3.32B |
| Total Liabilities | 5.36B | 4.90B | 4.83B | 4.47B | 4.08B | 3.90B |
| Stockholders Equity | 1.03B | 1.07B | 1.06B | 891.90M | 895.20M | 1.08B |
Cash Flow | ||||||
| Free Cash Flow | -55.20M | 417.50M | -78.10M | -219.30M | 179.00M | 8.10M |
| Operating Cash Flow | 170.10M | 567.40M | 109.20M | -15.70M | 406.10M | 306.30M |
| Investing Cash Flow | -237.90M | -499.00M | -178.30M | -218.70M | -299.70M | -1.30B |
| Financing Cash Flow | -23.40M | -106.10M | 84.30M | 34.10M | -176.60M | 1.12B |
Sonic Automotive Technical Analysis
Negative
99.82
Price Trends
88.96
Negative
79.80
Positive
71.00
Positive
Market Momentum
-0.68
Positive
38.63
Neutral
4.02
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SAH, the sentiment is Negative. The current price of 99.82 is above the 20-day moving average (MA) of 96.06, above the 50-day MA of 88.96, and above the 200-day MA of 71.00, indicating a neutral trend. The MACD of -0.68 indicates Positive momentum. The RSI at 38.63 is Neutral, neither overbought nor oversold. The STOCH value of 4.02 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SAH.
Sonic Automotive Risk Analysis
Sonic Automotive disclosed 36 risk factors in its most recent earnings report. Sonic Automotive reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sonic Automotive Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $7.11B | 9.80 | 33.18% | ― | -0.06% | 35.87% | |
66 Neutral | $8.47B | 12.72 | 10.91% | 0.65% | 1.97% | -10.60% | |
65 Neutral | $4.31B | 8.65 | 13.04% | ― | 4.12% | -2.47% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
60 Neutral | $8.13B | 35.57 | 3.67% | ― | -1.69% | -58.01% | |
56 Neutral | $2.89B | 14.35 | 20.45% | 1.55% | 5.25% | 37.36% | |
52 Neutral | $3.42B | 11.92 | 9.96% | 0.63% | 0.81% | -33.60% |
* Consumer Cyclical Sector Average
SAH
Sonic Automotive
82.44
8.75
11.87%
ABG
Asbury
214.32
-8.70
-3.90%
AN
AutoNation
209.23
10.61
5.34%
KMX
CarMax
58.18
2.24
4.00%
GPI
Group 1 Automotive
266.47
-160.98
-37.66%
LAD
Driveway Vehicle Solutions
375.63
85.26
29.36%
Sonic Automotive Corporate Events
Business Operations and StrategyDividendsFinancial DisclosuresM&A Transactions
Sonic Automotive Posts Record Second-Quarter Revenue and Profit
Positive
Jul 30, 2026
On July 30, 2026, Sonic Automotive reported record consolidated second-quarter revenues of $3.9 billion, up 8% year over year, and all-time record quarterly gross profit of $616.2 million, while net income surged to $57.4 million. Results were dri...
Business Operations and StrategyExecutive/Board Changes
Sonic Automotive Grants Performance-Based Equity Awards to Executives
Positive
May 8, 2026
On May 6, 2026, Sonic Automotive’s Compensation Committee approved grants of performance-based restricted stock units to three top executives under the company’s 2026 Equity Incentive Plan, awarding 69,872 units to CEO David Bruton Smi...
Business Operations and StrategyShareholder Meetings
Sonic Automotive Shareholders Approve New 2026 Equity Plan
Positive
May 1, 2026
At its annual meeting held on April 29, 2026, Sonic Automotive, Inc. stockholders approved a new 2026 Equity Incentive Plan, which replaces the company’s 2012 Stock Incentive Plan and became effective retroactively as of February 11, 2026. T...
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresM&A Transactions
Sonic Automotive Posts Record Q1 Results, Boosts Shareholder Returns
Positive
Apr 30, 2026
On April 30, 2026, Sonic Automotive reported first-quarter 2026 results showing record consolidated revenue of $3.7 billion and gross profit of $598.8 million, with adjusted net income rising 7% year over year despite lower reported earnings due t...
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.