Sonic Automotive (SAH) AI Stock Analysis

• Market Cap: $2.97B
• Dividend Yield: 1.6%
• Average Volume (3M): 181.85K
• Price to Earnings (P/E): 12.5
• Beta (1Y): 1.01
• Revenue Growth: 1.59%
• EPS Growth: 43.91%
• Country: US
• Employees: 10,800
• Sector: Consumer Cyclical
• Sector Strength: 61
• Industry: Auto - Dealerships
• EPS (TTM): 1.48
• Shares Outstanding: 21,931,620
• 10 Day Avg. Volume: 198,565
• 30 Day Avg. Volume: 181,855
• PEG Ratio: -0.30
• Price to Book (P/B): 2.13
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 10.65
• Enterprise Value/Market Cap: 1.74
• Enterprise Value/Revenue: 0.09
• Enterprise Value/Gross Profit: 2.36
• Enterprise Value/Ebitda: 2.13
• 1Y Price Target: $72.57
• Price Target Upside: -17.13% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 76 Outperform
• Price Target: $90.00 ▲(2.77%Upside)

Sonic Automotive's overall stock score is driven primarily by robust financial performance and positive technical indicators. The company shows strong revenue growth and market momentum, although high leverage and market uncertainties present risks. The stock appears reasonably valued, with a solid earnings call performance underscoring its strategic achievements.

Positive Factors

Acquisition and Expansion

The acquisition of 4 dealerships adds $500M in sales, making Sonic the largest U.S. retailer of Jaguar Land Rover.

Business Performance

EchoPark is emerging as a more profitable and efficient business, delivering strong results and returning to pre-tax profitability.

Strategic Growth

SAH's entry into the powersports market offers a capital-light growth avenue with potential for consolidation and long-term upside.

Negative Factors

Market Uncertainty

Sonic understandably suspended a few aspects of its 2025 outlook and adjusted others due to growing uncertainty around the macro environment.

Regulatory Challenges

Regulatory headwinds from new vehicle tariffs are driving elevated uncertainty and potentially dampening unit enthusiasm.

Sonic Automotive Business Overview & Revenue Model

Company Description

Sonic Automotive, Inc. is a Fortune 500 company based in Charlotte, North Carolina, and is one of the largest automotive retailers in the United States. The company operates in two primary segments: Franchised Dealerships and EchoPark. Through its Franchised Dealerships segment, Sonic Automotive offers new and used vehicles, vehicle parts and accessories, and provides vehicle maintenance and repair services. EchoPark, its pre-owned car dealership brand, focuses on selling quality used cars at competitive prices. Sonic Automotive aims to deliver exceptional customer experiences across all its operations and is committed to growth through strategic acquisitions and expansion of its EchoPark brand.

How the Company Makes Money

Sonic Automotive generates revenue through several key streams. The primary source of income comes from the sale of new and used vehicles at its franchised dealerships and EchoPark locations. Additionally, the company earns money by selling vehicle parts and accessories and providing maintenance and repair services. Financing and insurance products offered to customers also contribute to its revenue, as Sonic Automotive partners with financial institutions to offer competitive loan and lease options. Furthermore, the company benefits from manufacturer incentives and volume-based bonuses, which help bolster its income. EchoPark, which focuses on pre-owned vehicles, is a significant growth driver for the company, contributing to both sales volume and profitability.

Sonic Automotive Financial Statement Overview

Summary

Sonic Automotive demonstrates robust revenue growth and improved cash flow management, which are positive indicators for the company's financial health. However, high leverage and declining profit margins present potential risks. Continued focus on operational efficiency and debt management will be crucial to sustain its growth trajectory and financial stability.

Income Statement

Sonic Automotive shows strong revenue growth, with a notable increase of approximately 48% from 2020 to 2025. The gross profit margin remains stable, indicating efficient cost management despite fluctuations. However, the net profit margin and EBIT margin have decreased over the years, suggesting potential challenges in managing operational expenses or changes in market conditions.

Balance Sheet

The company's debt-to-equity ratio indicates high leverage, which could pose risks if market conditions worsen. There is a positive trend in stockholders' equity, but the equity ratio remains relatively low, reflecting a high reliance on debt financing. Return on equity has improved, demonstrating more effective use of equity capital in generating profits.

Cash Flow

Sonic Automotive has shown significant improvement in free cash flow from 2024 to 2025, moving from negative to positive, indicating better cash management. The operating cash flow to net income ratio is strong, suggesting effective cash conversion. However, the free cash flow to net income ratio tends to fluctuate, which could impact long-term financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.49B	14.22B	14.37B	14.00B	12.40B	9.77B
Gross Profit	2.19B	2.19B	2.25B	2.32B	1.91B	1.42B
EBITDA	649.70M	605.10M	558.60M	441.00M	622.50M	125.40M
Net Income	244.60M	216.00M	178.20M	88.50M	348.90M	-50.66M
Balance Sheet
Total Assets	5.88B	5.90B	5.36B	4.98B	4.98B	3.75B
Cash, Cash Equivalents and Short-Term Investments	64.60M	44.00M	28.90M	229.20M	299.40M	170.31M
Total Debt	4.05B	4.13B	3.86B	3.49B	3.32B	2.45B
Total Liabilities	4.78B	4.83B	4.47B	4.08B	3.90B	2.93B
Stockholders Equity	1.09B	1.06B	891.90M	895.20M	1.08B	814.80M
Cash Flow
Free Cash Flow	31.40M	-78.10M	-219.30M	179.00M	8.10M	153.90M
Operating Cash Flow	219.90M	109.20M	-15.70M	406.10M	306.30M	281.08M
Investing Cash Flow	-174.40M	-178.30M	-218.70M	-299.70M	-1.30B	-100.18M
Financing Cash Flow	-300.00K	84.30M	34.10M	-176.60M	624.80M	-39.69M

Sonic Automotive Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 87.57
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SAH, the sentiment is Positive. The current price of 87.57 is above the 20-day moving average (MA) of 78.55, above the 50-day MA of 70.82, and above the 200-day MA of 64.71, indicating a bullish trend. The MACD of 4.05 indicates Negative momentum. The RSI at 81.38 is Negative, neither overbought nor oversold. The STOCH value of 95.06 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SAH.

Sonic Automotive Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LAD	82 Outperform	$9.19B	11.12	12.95%	0.62%	12.96%	-6.25%
GPI	77 Outperform	$6.03B	13.13	16.25%	0.43%	15.13%	-15.98%
PAG	77 Outperform	$12.08B	12.87	18.57%	2.76%	3.29%	-1.29%
SAH	76 Outperform	$2.97B	12.49	24.52%	1.60%	1.59%	43.91%
ABG	67 Neutral	$5.09B	12.31	11.92%	―	11.11%	-23.41%
ABG	67 Neutral	$5.09B	12.31	11.92%	―	11.11%	-23.41%
Sector *	62 Neutral	$16.90B	11.24	-7.48%	2.95%	1.60%	-23.76%
AN	60 Neutral	$8.01B	12.57	28.45%	―	-0.24%	-19.76%
AN	60 Neutral	$8.01B	12.57	28.45%	―	-0.24%	-19.76%

Sonic Automotive Corporate Events

Sonic Automotive Reports Strong Q1 2025 Financial Performance

On April 24, 2025, Sonic Automotive reported a strong financial performance for the first quarter of 2025, with record revenues of $3.7 billion, an 8% increase year-over-year, and a significant rise in net income by 68% to $70.6 million. The EchoPark segment achieved all-time record gross profit and segment income, marking a 455% improvement from the previous year. Despite uncertainties related to tariffs, Sonic Automotive remains focused on expanding its market share and optimizing its operations to sustain long-term growth and shareholder value.