Skip to Content

Asbury Automotive Group Inc ABG

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Asbury Makes the Right Move With Fully Digital-Capable Clicklane Shopping Tool

Analyst Note

| David Whiston, CFA, CPA, CFE |

On Dec. 2, Asbury’s stock rose 4.3% after it unveiled its new omnichannel shopping platform for new and used vehicles called Clicklane, which will replace its current tool called Push Start. Management also announced a 2025 revenue goal of $20 billion, with $12 billion of incremental revenue above adjusted 2020 revenue of $8 billion split as $5 billion from Clicklane, $2 billion from same-store growth, and $5 billion from acquisitions. After incorporating this target into our model and giving the firm some assumed overhead cost benefits from less brick-and-mortar stores needed over time, we are raising our fair value estimate by 65% to $168. The change is from a compound annual growth rate for 2020-24 revenue of 18.6%, up from nearly 8% in our prior model, and due to modeling more scale to allow our midcycle operating margin including floorplan interest to be 4.5% instead of about 4%.

Read Full Analysis

Company Profile

Business Description

Asbury Automotive Group is a regional collection of automobile dealerships that went public in March 2002. The company operates over 90 stores with associated parts and service departments and 25 collision centers. About 79% of new-vehicle revenue is from luxury and import brands. Asbury also offers third-party financing and insurance products. Asbury operates in 10 states (mostly Texas and the Southeast), and the company entered Colorado in 2019. Its store brands include David McDavid and Park Place in Texas, Plaza in Missouri, and Nalley and Crown in the southeastern U.S. Asbury generated $7.2 billion of revenue in 2019 and is based in the Atlanta area.

Contact
2905 Premiere Parkway North West, Suite 300
Duluth, GA, 30097
T +1 770 418-8200
Sector Consumer Cyclical
Industry Auto & Truck Dealerships
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 8,500

Related