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Sonic Automotive Inc Class A SAH

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Stock XNYS Rating as of
$56.66 −0.50 (0.87%)
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As of Delayed Price Closed
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Company Report

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We See Sonic With a Long Growth Runway in Franchise Autos, Used Vehicle Stores, and Powersports

David Whiston

Sonic Automotive is expanding beyond franchise auto dealerships. Its omnichannel Digital One Stop process and the CarCash app let consumers shop digitally or in-store and helps Sonic procure more used-vehicle inventory. Management has also worked to make the car-buying process nearly paperless, place the customer with only one person for the entire transaction, and enable the customer to take delivery of a vehicle in an hour or less after deciding which one to buy. It's building out a powersports segment which for now will likely focus on motorcycle stores such as Harley-Davidson.

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Price vs Fair Value

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SAH is trading at a 242% premium.
Price
$57.16
Fair Value
$21.00
Uncertainty
High
1-Star Price
$87.30
5-Star Price
$73.50
Economic Moat
Ybjnkxt
Capital Allocation
Ktdmpsp

Bulls Say, Bears Say

Bulls

Auto dealerships are well-diversified businesses that have lucrative parts and servicing operations, which help them be profitable in almost any environment.

Bears

Dealerships are prone to macroeconomic cycles and used vehicle profitability is under huge pressure following the chip shortage. Used profitability will improve but it will take time.

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Trading Information

Previous Close Price
$57.16
Day Range
$56.00–56.89
52-Week Range
$41.19–64.68
Bid/Ask
$37.00 / $90.08
Market Cap
$1.92 Bil
Volume/Avg
238,806 / 206,185

Key Statistics

Price/Earnings (Normalized)
8.28
Price/Sales
0.14
Dividend Yield (Trailing)
2.08%
Dividend Yield (Forward)
2.12%
Total Yield
7.98%

Company Profile

Sonic Automotive is one of the largest auto dealership groups in the United States. The company has 108 franchised stores in 18 states, primarily in metropolitan areas in California, Texas, and the Southeast, plus 25 EchoPark used-vehicle stores, 16 collision centers, and 13 powersports locations. The franchise stores derive revenue from new and used vehicles plus parts and collision repair, finance, insurance, and wholesale auctions. Luxury and import dealerships make up about 86% of franchise new-vehicle revenue, while Honda, BMW, Mercedes, and Toyota constitute about 58% of new-vehicle revenue. BMW is the largest brand at about 25%. 2023's revenue was $14.4 billion, with EchoPark's portion totaling $2.4 billion. Sonic bought RFJ Auto in December 2021, which added $3.2 billion in sales.
Sector
Consumer Cyclical
Industry
Auto & Truck Dealerships
Stock Style Box
Small Value
Total Number of Employees
10,500
Website
https://www.sonicautomotive.com

Competitors

Valuation

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Metric
SAH
BRK.B
AN
Price/Earnings (Normalized)
 8.2822.007.78
Price/Book Value
 2.121.552.93
Price/Sales
 0.142.180.27
Price/Cash Flow
 5.3524.025.92
Price/Earnings
SAH
BRK.B
AN

Financial Strength

Metric
SAH
BRK.B
AN
Quick Ratio
 0.24—0.20
Current Ratio
 1.10—0.77
Interest Coverage
 2.3918.865.14
Quick Ratio
SAH
BRK.B
AN

Profitability

Metric
SAH
BRK.B
AN
Return on Assets (Normalized)
 4.65%3.90%8.24%
Return on Equity (Normalized)
 27.64%7.49%43.15%
Return on Invested Capital (Normalized)
 8.16%6.61%12.50%
Return on Assets
SAH
BRK.B
AN
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