tiprankstipranks
Trending News
More News >
Sonic Automotive (SAH)
:SAH
Advertisement

Sonic Automotive (SAH) AI Stock Analysis

Compare
184 Followers

Top Page

SAH

Sonic Automotive

(NYSE:SAH)

Rating:67Neutral
Price Target:
$82.00
▲(4.05%Upside)
Sonic Automotive's overall stock score reflects solid revenue growth and improved cash flow management, which are vital strengths. However, high leverage and declining profit margins are significant risks. The technical indicators suggest potential short-term weakness, but the earnings call provided a generally positive outlook with record performances in several segments. The valuation is reasonable but not exceptionally appealing.
Positive Factors
Earnings
EchoPark posted its second consecutive quarter of record segment income and EBITDA, with strong margin performance.
Market Position
SAH is the smallest of the six public auto dealers, benefiting from a resilient premium-luxury franchised business and strong exposure to key markets in Texas and California.
Strategic Expansion
Strategic expansion continues with the acquisition of four Jaguar Land Rover stores in California, establishing Sonic as the largest JLR retailer in the U.S.
Negative Factors
Shipment Delays
JLR halted shipments at the time of the Tariff announcements.
Valuation
SAH continues to generate strong results, yet trades at lower multiples than peers.

Sonic Automotive (SAH) vs. SPDR S&P 500 ETF (SPY)

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 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 Earnings Call Summary

Earnings Call Date:Jun 30, 2025
(Q2-2025)
|
% Change Since: -2.17%|
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Positive
The earnings call highlighted several record performances across multiple segments, with significant growth in revenue and profitability. However, the impact of a noncash charge on GAAP EPS, a decline in used vehicle volume, and challenges in the Powersports segment present concerns. Overall, the positive achievements in revenue and segment performance slightly outweigh the lowlights.
Q2-2025 Updates
Positive Updates
Record-Breaking Second Quarter Revenue
Consolidated total revenues were a second quarter record, up 6% year-over-year, with consolidated gross profit growing 12% and consolidated adjusted EBITDA increasing 22%.
Franchised Dealerships Segment Success
Second quarter record franchise revenues of $3.1 billion, up 6% year-over-year on a same-store basis. Same-store new retail volume increased by 5%, with a 10% increase in same-store fixed operations revenues.
EchoPark Segment Achievements
EchoPark segment income and adjusted EBITDA reached all-time quarterly records, with $11.7 million and $16.4 million respectively, up 128% year-over-year. EchoPark gross profit increased by 22% year-over-year.
Strong F&I Performance
All-time record quarterly franchised F&I GPU of $2,721 per unit, up 12% sequentially and 14% year-over-year.
Powersports Segment Growth
Record second quarter revenues of $48.1 million, up 21% year-over-year, with gross profit up 17%.
Increased Quarterly Cash Dividend
Board of Directors approved a 9% increase to the quarterly cash dividend to $0.38 per share.
Negative Updates
Noncash Charge Impact on GAAP EPS
Reported GAAP EPS was a loss of $1.34 per share due to a noncash charge related to franchise asset impairment testing.
Used Vehicle Volume Decline
Same-store used volume decreased 4% year-over-year, driven by lower supply of late-model used vehicles and ongoing consumer affordability challenges.
Powersports Segment EBITDA Decrease
Powersports segment adjusted EBITDA was $2 million, down 13% year-over-year.
EchoPark Revenue Decline
EchoPark revenues of $509 million were down 2% year-over-year.
Company Guidance
During the Sonic Automotive Second Quarter 2025 Earnings Call, management provided detailed guidance, highlighting a reported GAAP EPS loss of $1.34 per share, attributed mainly to a noncash franchise asset impairment charge. However, adjusted EPS reached $2.19, marking a 49% year-over-year increase. The company achieved second-quarter record revenues of $3.1 billion for the Franchised Dealerships segment, showing a 6% year-over-year growth on a same-store basis. EchoPark, the company's used car segment, reported record segment income of $11.7 million and adjusted EBITDA of $16.4 million, up 128% year-over-year, despite a slight 2% decline in revenues. In the Powersports segment, Sonic Automotive generated $48.1 million in revenues, a 21% increase year-over-year. The company ended the quarter with $775 million in liquidity, and the Board approved a 9% increase in the quarterly cash dividend. Management expressed optimism about future growth across its segments and highlighted strategic adjustments to mitigate potential tariff impacts on vehicle pricing.

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
75
Positive
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
60
Neutral
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
70
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue14.49B14.22B14.37B14.00B12.40B9.77B
Gross Profit2.19B2.19B2.25B2.32B1.91B1.42B
EBITDA649.70M605.10M558.60M441.00M622.50M125.40M
Net Income244.60M216.00M178.20M88.50M348.90M-50.66M
Balance Sheet
Total Assets5.88B5.90B5.36B4.98B4.98B3.75B
Cash, Cash Equivalents and Short-Term Investments64.60M44.00M28.90M229.20M299.40M170.31M
Total Debt4.05B4.13B3.86B3.49B3.32B2.45B
Total Liabilities4.78B4.83B4.47B4.08B3.90B2.93B
Stockholders Equity1.09B1.06B891.90M895.20M1.08B814.80M
Cash Flow
Free Cash Flow31.40M-78.10M-219.30M179.00M8.10M153.90M
Operating Cash Flow219.90M109.20M-15.70M406.10M306.30M281.08M
Investing Cash Flow-174.40M-178.30M-218.70M-299.70M-1.30B-100.18M
Financing Cash Flow-300.00K84.30M34.10M-176.60M624.80M-39.69M

Sonic Automotive Technical Analysis

Technical Analysis Sentiment
Positive
Last Price78.81
Price Trends
50DMA
76.79
Positive
100DMA
68.83
Positive
200DMA
66.67
Positive
Market Momentum
MACD
0.04
Positive
RSI
47.79
Neutral
STOCH
18.71
Positive
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 78.81 is below the 20-day moving average (MA) of 82.74, above the 50-day MA of 76.79, and above the 200-day MA of 66.67, indicating a neutral trend. The MACD of 0.04 indicates Positive momentum. The RSI at 47.79 is Neutral, neither overbought nor oversold. The STOCH value of 18.71 is Positive, 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

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$11.58B12.3418.57%2.71%3.29%-1.29%
75
Outperform
$5.65B12.0915.72%0.44%19.75%-10.74%
74
Outperform
$4.67B11.3111.92%11.11%-23.41%
71
Outperform
$7.66B12.7327.24%3.15%-12.49%
67
Neutral
$2.69B17.5415.99%1.71%4.48%-16.26%
67
Neutral
$8.15B9.8612.95%0.68%12.96%-6.25%
61
Neutral
€6.07B10.66-11.12%4.08%3.99%-37.65%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SAH
Sonic Automotive
76.36
20.08
35.68%
ABG
Asbury
237.66
-19.53
-7.59%
AN
AutoNation
196.26
16.85
9.39%
GPI
Group 1 Automotive
425.54
77.70
22.34%
LAD
Lithia Motors
307.07
42.19
15.93%
PAG
Penske Automotive Group
175.02
14.90
9.31%

Sonic Automotive Corporate Events

M&A TransactionsDividendsBusiness Operations and StrategyFinancial Disclosures
Sonic Automotive Reports Q2 Revenue Growth Despite Loss
Neutral
Jul 24, 2025

On July 24, 2025, Sonic Automotive reported its second-quarter financial results, highlighting a record total revenue of $3.7 billion, a 6% increase year-over-year, despite a net loss of $45.6 million due to a franchise asset impairment charge. The company achieved significant growth in its EchoPark Segment with record income and adjusted EBITDA, and completed the acquisition of four Jaguar Land Rover dealerships, becoming the largest retailer of these brands in the U.S. Sonic’s board also approved a 9% increase in the quarterly cash dividend, reflecting confidence in the company’s strategic direction and financial health.

The most recent analyst rating on (SAH) stock is a Buy with a $66.00 price target. To see the full list of analyst forecasts on Sonic Automotive stock, see the SAH Stock Forecast page.

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.Date of analysis: Jul 25, 2025