Sonic Automotive (SAH)
NYSE:SAH
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Sonic Automotive
(NYSE:SAH)
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Rating:56Neutral
Price Target:
$65.00
▼(-2.69% Downside)
Action:ReiteratedDate:02/24/26
The score reflects middling financial quality dominated by elevated leverage and recently weaker revenue/margins, partially offset by a strong 2025 cash-flow rebound. Earnings-call tone and guidance were broadly constructive (records, improving EchoPark profitability, capital returns) but near-term volume pressure and rising floorplan interest expense temper upside. Technically the stock is neutral with longer-term downtrend signals, while valuation and dividend provide moderate support.
Positive Factors
High-margin fixed ops & F&I contribution
Stable, high-margin revenue from fixed operations and F&I provides durable earnings support regardless of new-vehicle cycles. With >75% of Q4 gross profit from these lines, Sonic can sustain margins and cash flow through periods of new-vehicle volume weakness, stabilizing long-term profitability and cash generation.
Negative Factors
Elevated leverage
Consistently high leverage (~4x equity) constrains Sonic's ability to absorb downturns or pursue rapid expansion. In a capital‑intensive, cyclical retail auto market, elevated debt increases interest sensitivity and reduces strategic optionality, raising refinancing and covenant risk during prolonged softness.
Read all positive and negative factors
Positive Factors
Negative Factors
High-margin fixed ops & F&I contribution
Stable, high-margin revenue from fixed operations and F&I provides durable earnings support regardless of new-vehicle cycles. With >75% of Q4 gross profit from these lines, Sonic can sustain margins and cash flow through periods of new-vehicle volume weakness, stabilizing long-term profitability and cash generation.
Read all positive factors
Sonic Automotive (SAH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.24B
Dividend Yield2.27%
Average Volume (3M)201.34K
Price to Earnings (P/E)11.1
Beta (1Y)1.16
Revenue Growth9.09%
EPS Growth-33.59%
CountryUS
Employees10,800
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)1.52
Shares Outstanding21,546,494
10 Day Avg. Volume225,503
30 Day Avg. Volume201,338
Financial Highlights & Ratios
PEG Ratio-0.39
Price to Book (P/B)1.97
Price to Sales (P/S)0.14
P/FCF Ratio5.04
Enterprise Value/Market Cap2.89
Enterprise Value/Revenue0.43
Enterprise Value/Gross Profit2.93
Enterprise Value/Ebitda12.24
Forecast
1Y Price Target
$73.00Price Target Upside9.28% Upside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)6.66
Revenue Forecast (FY)$15.73B
Sonic Automotive Business Overview & Revenue Model
Company Description
Sonic Automotive, Inc. operates as an automotive retailer in the United States. It operates in two segments, Franchised Dealerships and EchoPark. The Franchised Dealerships segment is involved in the sale of new and used cars and light trucks, and...
How the Company Makes Money
Sonic Automotive generates revenue primarily through the sale of new and used vehicles, which constitutes a significant portion of its earnings. The company also earns money through its finance and insurance (F&I) services, where it provides finan...
Sonic Automotive Earnings Call Summary
Earnings Call Date:Feb 18, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
Overall the call presents a constructive picture: the company delivered multiple full-year and quarterly record financials (revenue, gross profit, adjusted EBITDA, EPS growth) and showed strong margin gains in fixed operations, F&I and EchoPark profitability. Management articulated clear strategic initiatives (EchoPark expansion, non-auction sourcing, technology and brand investment) and maintained a strong liquidity and capital-return posture. Offsetting these positives are near-term operational challenges in Q4 same-store vehicle volumes (notably an 11% decline in same-store new vehicle retail volume), some used-unit and warranty softness, EchoPark unit declines, and macro/industry risks from tariffs, OEM pass-throughs and BEV-related volatility which could pressure new vehicle affordability and future volumes. On balance, the positive outcome from record annual results, margin improvements and strategic initiatives outweighs the transitory volume and market headwinds cited.Positive Updates
Full-Year Record Revenue and Profitability
FY2025 consolidated total revenues reached an all-time annual record of $15.2 billion, up 7% year-over-year, consolidated total gross profit was an all-time record $2.4 billion, up 9% year-over-year, and consolidated adjusted EBITDA grew 10% to $615 million.
Negative Updates
Q4 Revenue and Same-Store Weakness
Consolidated Q4 total revenues were $3.9 billion, down 1% YoY. Franchise reported revenues of $3.4 billion were flat YoY but down 5% on a same-store basis driven by weaker new vehicle sales.
Read all updates
Q4-2025 Updates
Positive
Negative
Full-Year Record Revenue and Profitability
FY2025 consolidated total revenues reached an all-time annual record of $15.2 billion, up 7% year-over-year, consolidated total gross profit was an all-time record $2.4 billion, up 9% year-over-year, and consolidated adjusted EBITDA grew 10% to $615 million.
Read all positive updates
Company Guidance
Management’s 2026 guidance (see slide 13) calls for EchoPark to deliver high‑single‑digit retail volume growth in 2026, with a planned $10–$20 million incremental brand advertising spend beginning in 2Q (public impact expected in Q4’26) to support a disciplined store‑opening cadence (resume late‑2026, 1–2 stores in Q4’26, broader rollout in 2027) toward a long‑term goal of ~90% U.S. coverage and >1 million vehicles sold annually; franchise new‑vehicle GPU is guided to roughly $2,700–$3,000 per unit (potentially stronger in Q1), fixed‑ops same‑store growth is targeted mid‑single digits, and floor‑plan interest expense is expected to increase about 10% in 2026. Management also emphasized a strong balance sheet (available liquidity was $702 million at quarter end, including $306 million cash/floor‑plan deposits), a conservative leverage stance (comfortable up to ~3.5x net debt/EBITDA), a quarterly dividend of $0.38 per share payable April 15, 2026 (record March 13) and continued opportunistic share repurchases.Sonic Automotive Financial Statement Overview
Summary
Income Statement
55
Neutral
Balance Sheet
40
Negative
Cash Flow
58
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 15.15B | 14.22B | 14.37B | 14.00B | 12.40B |
| Gross Profit | 2.22B | 2.04B | 2.10B | 2.19B | 1.81B |
| EBITDA | 531.00M | 610.80M | 565.00M | 441.00M | 622.50M |
| Net Income | 118.70M | 216.00M | 178.20M | 88.50M | 348.90M |
Balance Sheet | |||||
| Total Assets | 5.97B | 5.90B | 5.36B | 4.98B | 4.98B |
| Cash, Cash Equivalents and Short-Term Investments | 6.30M | 44.00M | 28.90M | 229.20M | 299.40M |
| Total Debt | 4.23B | 4.13B | 3.86B | 3.49B | 3.32B |
| Total Liabilities | 4.90B | 4.83B | 4.47B | 4.08B | 3.90B |
| Stockholders Equity | 1.07B | 1.06B | 891.90M | 895.20M | 1.08B |
Cash Flow | |||||
| Free Cash Flow | 417.50M | -89.60M | -256.50M | 153.90M | 503.50M |
| Operating Cash Flow | 567.40M | 97.70M | -52.90M | 381.00M | 801.70M |
| Investing Cash Flow | -499.00M | -178.30M | -218.70M | -299.70M | -1.30B |
| Financing Cash Flow | -106.10M | 95.80M | 71.30M | -151.50M | 624.80M |
Sonic Automotive Technical Analysis
Positive
66.80
Price Trends
61.60
Positive
62.13
Positive
69.43
Negative
Market Momentum
0.36
Negative
62.58
Neutral
84.67
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 66.8 is above the 20-day moving average (MA) of 61.64, above the 50-day MA of 61.60, and below the 200-day MA of 69.43, indicating a neutral trend. The MACD of 0.36 indicates Negative momentum. The RSI at 62.58 is Neutral, neither overbought nor oversold. The STOCH value of 84.67 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
62 Neutral | $3.82B | 9.17 | 9.29% | ― | 8.07% | 60.95% | |
62 Neutral | $3.95B | 15.78 | 10.85% | 0.49% | 19.45% | -24.27% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $6.00B | 10.30 | 12.08% | 0.64% | 8.56% | 17.84% | |
60 Neutral | $6.05B | 23.09 | 7.39% | ― | 0.12% | 2.78% | |
58 Neutral | $6.77B | 12.12 | 26.70% | ― | 6.06% | -1.71% | |
56 Neutral | $2.24B | 11.15 | 11.15% | 2.27% | 9.09% | -33.59% |
* Consumer Cyclical Sector Average
SAH
Sonic Automotive
66.80
11.27
20.28%
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Sonic Automotive Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Sonic Automotive Posts Record Profit Amid Dividend Increase
Positive
Feb 18, 2026
On February 18, 2026, Sonic Automotive reported fourth-quarter 2025 revenue of $3.9 billion, down 1% year over year, but delivered a record quarterly gross profit of $598.7 million and adjusted net income of $52.2 million, while also repurchasing ...
Business Operations and StrategyExecutive/Board Changes
Sonic Automotive Sets 2026 Performance-Based Executive Bonus Plan
Positive
Feb 13, 2026
On February 11, 2026, Sonic Automotive’s Compensation Committee set the framework for 2026 performance-based cash bonuses covering the period from January 1 to December 31, 2026, for Chairman and CEO David Bruton Smith, President Jeff Dyke, ...
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.