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Sonic Automotive Inc Class A SAH

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Stock XNYS Rating as of
$62.30 +5.63 (9.93%)
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As of Delayed Price Closed
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Company Report

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Sonic Automotive Earnings: New Vehicle Profits Falling but Should Remain Above 2019 Levels

David Whiston

Sonic Automotive's stock rose nearly 11% on April 25 after the firm reported a good first quarter. Adjusted diluted EPS of $1.36 rose 2.3% year over year and beat the $1.30 LSEG consensus. We are leaving our fair value estimate in place. We like that Sonic repurchased $27 million of stock in the quarter below our fair value estimate, and liquidity is solid at $847 million. EchoPark delivered good news with its first positive adjusted EBITDA quarter for any quarter since first-quarter 2021.

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Price vs Fair Value

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SAH is trading at a 18% discount.
Price
$50.90
Fair Value
$46.00
Uncertainty
High
1-Star Price
$34.70
5-Star Price
$62.10
Economic Moat
Wdnbmc
Capital Allocation
Szgbsqx

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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News

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Trading Information

Previous Close Price
$56.67
Day Range
$58.46–64.68
52-Week Range
$39.02–64.68
Bid/Ask
$62.30 / $62.99
Market Cap
$2.12 Bil
Volume/Avg
817,288 / 250,129

Key Statistics

Price/Earnings (Normalized)
9.11
Price/Sales
0.15
Dividend Yield (Trailing)
1.89%
Dividend Yield (Forward)
1.93%
Total Yield
7.26%

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
AN
ABG
Price/Earnings (Normalized)
 9.117.967.07
Price/Book Value
 2.333.001.34
Price/Sales
 0.150.270.30
Price/Cash Flow
 5.886.055.25
Price/Earnings
SAH
AN
ABG

Financial Strength

Metric
SAH
AN
ABG
Quick Ratio
 0.240.200.21
Current Ratio
 1.100.771.06
Interest Coverage
 2.395.145.84
Quick Ratio
SAH
AN
ABG

Profitability

Metric
SAH
AN
ABG
Return on Assets (Normalized)
 4.65%8.24%7.99%
Return on Equity (Normalized)
 27.64%43.15%22.03%
Return on Invested Capital (Normalized)
 8.16%12.50%11.45%
Return on Assets
SAH
AN
ABG
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