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Sonic Automotive (SAH)
NYSE:SAH
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Sonic Automotive
(NYSE:SAH)
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Rating:61Neutral
Price Target:
$67.00
▲(5.36% 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 (SAH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.22B
Dividend Yield2.25%
Average Volume (3M)202.02K
Price to Earnings (P/E)17.5
Beta (1Y)1.11
Revenue Growth9.09%
EPS Growth-33.59%
CountryUS
Employees10,800
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)1.41
Shares Outstanding22,143,309
10 Day Avg. Volume195,116
30 Day Avg. Volume202,022
Financial Highlights & Ratios
PEG Ratio0.41
Price to Book (P/B)2.03
Price to Sales (P/S)0.15
P/FCF Ratio-24.11
Enterprise Value/Market Cap3.04
Enterprise Value/Revenue0.44
Enterprise Value/Gross Profit3.07
Enterprise Value/Ebitda12.53
Forecast
1Y Price Target
$77.67Price Target Upside22.14% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Sonic Automotive Business Overview & Revenue Model
Company DescriptionSonic 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 replacement parts; provision of vehicle maintenance, manufacturer warranty repair, and paint and collision repair services; and arrangement of extended warranties, service contracts, financing, insurance, and other aftermarket products for its guests. The EchoPark segment sells used cars and light trucks; and arranges finance and insurance product sales for its guests in pre-owned vehicle specialty retail locations. As of December 31, 2021, the company operated 140 new vehicle franchises representing 28 brands of cars and light trucks; 17 collision repair centers in 17 states; and 46 EchoPark stores in 16 states, including 11 Northwest Motorsport pre-owned vehicle stores. Sonic Automotive, Inc. was incorporated in 1997 and is based in Charlotte, North Carolina.
How the Company Makes MoneySonic 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 financing options to customers and sells insurance products, which contribute to higher profit margins. Additional revenue comes from service and parts sales, as customers return to dealerships for maintenance and repairs. Sonic Automotive has established partnerships with various vehicle manufacturers and financial institutions, enhancing its ability to offer competitive financing options and exclusive vehicle models. Additionally, the company's focus on digital retailing and customer experience has helped drive sales and service revenue, contributing to its overall financial performance.
Sonic Automotive Earnings Call Summary
Earnings Call Date:Sep 30, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 18, 2026
Earnings Call Sentiment Neutral
The earnings call reflects a balance between strong revenue and growth performance across several segments, such as the Franchised Dealerships and Powersports, and challenges like increased medical expenses and EchoPark segment struggles. While the company achieved record-breaking revenues, the impact of higher expenses and a decline in certain sales metrics, particularly in EchoPark and electric vehicles, presents concerns.Q3-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
Consolidated total revenues were an all-time quarterly record of $4 billion, up 14% year-over-year. All-time record quarterly consolidated gross profit grew 13% and consolidated adjusted EBITDA increased 11%.
Franchised Dealerships Segment Success
All-time record quarterly franchise revenues of $3.4 billion, up 17% year-over-year and up 11% on a same-store basis. This was driven by a 7% increase in same-store new retail volume and a 6% increase in same-store fixed operations revenues.
Powersports Segment Performance
Generated all-time record quarterly revenues of $84 million, up 42% year-over-year and all-time record quarterly gross profit of $23 million, up 32% year-over-year. Powersports segment adjusted EBITDA was an all-time quarterly record of $10.1 million, up 74% year-over-year.
Balance Sheet and Liquidity
Ended the quarter with $815 million in available liquidity, including $264 million in combined cash and floor plan deposits. Completed acquisition of Jaguar Land Rover, cementing Sonic Automotive as the largest Jaguar Land Rover retailer in the U.S.
Negative Updates
Higher Medical Expenses Impact
Third quarter earnings were negatively affected by a significant increase in medical expenses and a higher-than-expected effective income tax rate, which partially offset the strength of operating performance.
EchoPark Segment Challenges
EchoPark segment retail unit sales volume for the quarter decreased 8% year-over-year. EchoPark revenues were $523 million, down 4% year-over-year and gross profit of $54 million, down 1% year-over-year. Unexpected off-rental supply headwinds contributed to approximately 2,000 fewer retail unit sales.
New Vehicle GPU Decline
Same-store new vehicle GPU was $2,852, down 7% year-over-year and 16% sequentially due to a surge in pre-tariff consumer demand.
Luxury Vehicle Inventory Concerns
Luxury vehicle segments, such as BMW and Mercedes, experienced significant volume reductions in October, indicating potential future inventory challenges and the need for aggressive incentives.
Company Guidance
During the Sonic Automotive Third Quarter 2025 Earnings Conference Call, management highlighted several key financial metrics and strategic initiatives. Reported GAAP EPS was $1.33 per share, while adjusted EPS was $1.41, reflecting a 12% increase year-over-year. The company achieved a record $4 billion in consolidated total revenues, marking a 14% year-over-year growth, with gross profit rising 13% and adjusted EBITDA up 11%. The Franchised Dealerships segment saw all-time record quarterly revenues of $3.4 billion, a 17% increase year-over-year, driven by increases in new and used retail volumes and fixed operations revenues. However, the quarter was affected by increased medical expenses and a higher-than-expected tax rate. EchoPark segment revenues were $523 million, down 4% year-over-year due to unexpected off-rental supply challenges, but the segment achieved a record GPU of $3,359 per unit. The Powersports segment continued to grow, with a 42% increase in revenues and a 74% rise in adjusted EBITDA year-over-year. The company ended the quarter with $815 million in available liquidity and announced a quarterly dividend of $0.38 per share. Looking ahead, Sonic Automotive plans to focus on growth across its segments and navigate potential market challenges such as tariffs and luxury vehicle inventory levels.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.65
Positive
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.60
Neutral
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.70
Positive
| 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
Negative
63.59
Price Trends
65.24
Negative
71.36
Negative
69.82
Negative
Market Momentum
0.13
Negative
46.62
Neutral
24.47
Neutral
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 63.59 is above the 20-day moving average (MA) of 63.57, below the 50-day MA of 65.24, and below the 200-day MA of 69.82, indicating a bearish trend. The MACD of 0.13 indicates Negative momentum. The RSI at 46.62 is Neutral, neither overbought nor oversold. The STOCH value of 24.47 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
76 Outperform | $8.34B | 9.95 | 13.44% | 0.64% | 8.56% | 17.84% | |
73 Outperform | $5.15B | 14.35 | 12.27% | 0.50% | 19.45% | -24.27% | |
70 Neutral | $7.44B | 11.91 | 27.16% | ― | 6.06% | -1.71% | |
67 Neutral | $4.71B | 8.28 | 15.49% | ― | 8.07% | 60.95% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $2.22B | 17.52 | 12.51% | 2.25% | 9.09% | -33.59% | |
61 Neutral | $6.03B | 13.01 | 7.46% | ― | -1.49% | 2.78% |
* Consumer Cyclical Sector Average
SAH
Sonic Automotive
63.59
1.90
3.08%
ABG
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236.90
-8.87
-3.61%
AN
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209.12
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22.87%
KMX
CarMax
38.47
-45.80
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GPI
Group 1 Automotive
405.21
-12.85
-3.07%
LAD
Lithia Motors
343.89
-13.48
-3.77%
Sonic Automotive Corporate Events
M&A TransactionsDividendsBusiness Operations and StrategyFinancial Disclosures
Sonic Automotive Reports Record Q3 Revenues Despite Income Drop
Neutral
Oct 23, 2025
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.
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.