Sonic Automotive (SAH) AI Stock Analysis

• Market Cap: $2.14B
• Dividend Yield: 1.84%
• Average Volume (3M): 237.17K
• Price to Earnings (P/E): 16.9
• Beta (1Y): 1.15
• Revenue Growth: 9.09%
• EPS Growth: -33.59%
• Country: US
• Employees: 10,800
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Dealerships
• EPS (TTM): 1.41
• Shares Outstanding: 22,143,309
• 10 Day Avg. Volume: 163,859
• 30 Day Avg. Volume: 237,172
• PEG Ratio: 0.41
• Price to Book (P/B): 2.03
• Price to Sales (P/S): 0.15
• P/FCF Ratio: -24.11
• Enterprise Value/Market Cap: 3.15
• Enterprise Value/Revenue: 0.44
• Enterprise Value/Gross Profit: 3.07
• Enterprise Value/Ebitda: 12.53
• 1Y Price Target: $78.33
• Price Target Upside: 25.15% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 61 Neutral
• Price Target: $67.00 ▲(7.05% Upside)

Sonic Automotive's overall stock score reflects moderate financial performance and valuation, with strong earnings growth offset by technical weaknesses and operational challenges. The earnings call provided positive insights into revenue growth, but highlighted concerns in certain segments, impacting the overall sentiment.

Positive Factors

Revenue Growth

Sonic Automotive's strong revenue growth indicates robust demand and effective sales strategies, enhancing its market position and financial health.

Franchised Dealerships Success

The success in the Franchised Dealerships segment underscores Sonic Automotive's competitive advantage and operational efficiency, supporting long-term growth.

Powersports Segment Growth

The Powersports segment's rapid growth reflects a successful diversification strategy, contributing positively to Sonic Automotive's overall profitability.

Negative Factors

High Leverage

High leverage poses a risk to Sonic Automotive's financial stability, potentially limiting its ability to invest in growth and weather economic downturns.

EchoPark Segment Challenges

Declining sales in the EchoPark segment highlight operational challenges and could impact Sonic Automotive's overall profitability if not addressed.

Profitability Pressures

Decreasing net profit margins indicate pressure on profitability, which could hinder Sonic Automotive's ability to sustain long-term financial performance.

Sonic Automotive Business Overview & Revenue Model

Company Description

Sonic Automotive, Inc. is a leading automotive retailer in the United States, primarily engaged in the sale of new and used vehicles, as well as automotive-related services. The company operates in the retail automotive sector through its extensive network of franchised dealerships, representing various automobile brands. Sonic Automotive also provides vehicle financing, service contracts, and vehicle repair and maintenance services, catering to a diverse customer base across multiple markets.

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, where the company earns profits on the difference between the purchase price and the retail price. Additionally, Sonic Automotive makes money through the sale of financing and insurance products, including vehicle service contracts and extended warranties, which provide substantial margins. Another significant revenue stream is the service and parts department, where the company offers maintenance and repair services, generating income from labor and parts sales. Strategic partnerships with automotive manufacturers and financial institutions enhance their offerings and contribute to overall earnings. Furthermore, Sonic Automotive benefits from economies of scale and operational efficiencies across its dealership network, which helps to optimize profitability.

Sonic Automotive Financial Statement Overview

Summary

Sonic Automotive shows strong revenue growth and cash flow generation. However, declining profitability margins and high leverage pose significant challenges. The company needs to improve operational efficiency and manage debt levels to enhance financial stability.

Income Statement

Sonic Automotive has shown a consistent revenue growth trend, with a notable increase in the TTM period. However, the net profit margin has decreased significantly in the TTM period compared to the previous year, indicating pressure on profitability. The gross profit margin remains stable, but the EBIT and EBITDA margins have declined, suggesting operational challenges.

Balance Sheet

The company's debt-to-equity ratio is relatively high, indicating significant leverage, which could pose financial risks. The return on equity has decreased in the TTM period, reflecting reduced profitability. The equity ratio is stable, but the high debt levels are a concern for financial stability.

Cash Flow

Sonic Automotive has shown a remarkable improvement in free cash flow growth in the TTM period, indicating strong cash generation capabilities. The operating cash flow to net income ratio has improved, suggesting better cash conversion. However, the free cash flow to net income ratio, although positive, indicates room for improvement in cash profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.18B	14.22B	14.37B	14.00B	12.40B	9.77B
Gross Profit	2.20B	2.04B	2.10B	2.19B	1.81B	1.33B
EBITDA	538.00M	610.80M	565.00M	441.00M	622.50M	125.40M
Net Income	130.40M	216.00M	178.20M	88.50M	348.90M	-50.66M
Balance Sheet
Total Assets	6.02B	5.90B	5.36B	4.98B	4.98B	3.75B
Cash, Cash Equivalents and Short-Term Investments	89.40M	44.00M	28.90M	229.20M	299.40M	170.31M
Total Debt	4.16B	4.13B	3.86B	3.49B	3.32B	2.45B
Total Liabilities	4.95B	4.83B	4.47B	4.08B	3.90B	2.93B
Stockholders Equity	1.07B	1.06B	891.90M	895.20M	1.08B	814.80M
Cash Flow
Free Cash Flow	437.60M	-89.60M	-256.50M	153.90M	503.50M	429.54M
Operating Cash Flow	591.60M	97.70M	-52.90M	381.00M	801.70M	556.73M
Investing Cash Flow	-585.60M	-178.30M	-218.70M	-299.70M	-1.30B	-100.18M
Financing Cash Flow	65.90M	95.80M	71.30M	-151.50M	624.80M	-315.33M

Sonic Automotive Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 62.59
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SAH, the sentiment is Neutral. The current price of 62.59 is above the 20-day moving average (MA) of 62.08, below the 50-day MA of 68.44, and below the 200-day MA of 70.46, indicating a neutral trend. The MACD of -1.61 indicates Negative momentum. The RSI at 44.53 is Neutral, neither overbought nor oversold. The STOCH value of 68.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SAH.

Sonic Automotive Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LAD	69 Neutral	$7.78B	9.28	13.44%	0.69%	8.56%	17.84%
PAG	68 Neutral	$10.66B	11.40	17.30%	3.22%	2.25%	8.92%
ABG	67 Neutral	$4.48B	8.09	15.49%	―	8.07%	60.95%
GPI	66 Neutral	$5.05B	14.07	12.27%	0.50%	19.45%	-24.27%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
SAH	61 Neutral	$2.14B	16.91	12.51%	1.84%	9.09%	-33.59%
AN	55 Neutral	$7.67B	12.37	27.16%	―	6.06%	-1.71%

Sonic Automotive Corporate Events

Sonic Automotive’s Earnings Call: Record Revenues Amid Challenges

Sonic Automotive’s recent earnings call presented a mixed sentiment, balancing between impressive revenue growth and some operational challenges. The company celebrated record-breaking revenues and growth across several segments, notably Franchised Dealerships and Powersports. However, increased medical expenses and struggles within the EchoPark segment posed significant challenges. While the company achieved remarkable financial milestones, concerns over higher expenses and a decline in certain sales metrics, particularly in EchoPark and electric vehicles, were highlighted.

Sonic Automotive Reports Record Q3 Revenues Despite Income Drop

On October 23, 2025, Sonic Automotive announced its third-quarter financial results, highlighting record quarterly revenues of $4.0 billion and gross profit of $615.5 million. Despite these records, net income decreased by 37% year-over-year due to increased medical expenses and a higher tax rate. The Powersports segment achieved record revenues and adjusted EBITDA, while the EchoPark segment faced challenges with a decline in revenues and income. The acquisition of Jaguar Land Rover Santa Monica is expected to boost annual revenues by $125 million, enhancing Sonic’s market position in the luxury segment. The company also declared a quarterly cash dividend of $0.38 per share, payable in January 2026.

The most recent analyst rating on (SAH) stock is a Hold with a $72.00 price target. To see the full list of analyst forecasts on Sonic Automotive stock, see the SAH Stock Forecast page.