Penske Automotive Group (PAG) AI Stock Analysis

• Market Cap: $11.55B
• Dividend Yield: 2.86%
• Average Volume (3M): 214.83K
• Price to Earnings (P/E): 12.2
• Beta (1Y): 0.77
• Revenue Growth: 2.39%
• EPS Growth: 5.84%
• Country: US
• Employees: 28,700
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Dealerships
• EPS (TTM): 3.78
• Shares Outstanding: 66,044,370
• 10 Day Avg. Volume: 266,673
• 30 Day Avg. Volume: 214,830
• PEG Ratio: -0.99
• Price to Book (P/B): 1.96
• Price to Sales (P/S): 0.33
• P/FCF Ratio: 12.57
• Enterprise Value/Market Cap: 1.71
• Enterprise Value/Revenue: 0.65
• Enterprise Value/Gross Profit: 3.90
• Enterprise Value/Ebitda: 11.41
• 1Y Price Target: $190.25
• Price Target Upside: 9.16% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 68 Neutral
• Price Target: $192.00 ▲(10.16% Upside)

Penske Automotive Group's overall score reflects strong earnings growth and effective cost management, as highlighted in the earnings call. However, challenges in revenue growth and cash flow management weigh on the financial performance score. The technical analysis suggests bearish short-term momentum, but the valuation remains attractive with a reasonable P/E ratio and a solid dividend yield.

Positive Factors

Earnings Growth

Consistent earnings growth indicates strong operational performance and effective cost management, enhancing long-term profitability and shareholder value.

International Expansion

Expanding international operations, such as the acquisition in Italy, diversifies revenue streams and strengthens global market presence, supporting long-term growth.

Cost Management

Effective cost management enhances profitability by reducing operational expenses, allowing for better margins and financial stability over the long term.

Negative Factors

Revenue Growth Challenges

Negative revenue growth is a significant concern, indicating potential market share loss or demand issues that could impact long-term financial health.

Cash Flow Pressures

Significant cash flow pressures can limit the company's ability to invest in growth opportunities and meet financial obligations, affecting long-term sustainability.

Decline in Used Vehicle Sales

A decline in used vehicle sales can impact revenue and profitability, as this segment is crucial for maintaining steady cash flow and customer engagement.

Penske Automotive Group Business Overview & Revenue Model

Company Description

Penske Automotive Group, Inc., a diversified transportation services company, operates automotive and commercial truck dealerships. The company operates through four segments: Retail Automotive, Retail Commercial Truck, Other, and Non-Automotive Investments. It operates dealerships under franchise agreements with various automotive manufacturers and distributors. The company engages in the sale of new and used motor vehicles, and related products and services comprise vehicle and collision repair services, as well as placement of finance and lease contracts, third-party insurance products, and other aftermarket products; and wholesale of parts. It also operates a heavy and medium duty truck dealership, which offers Freightliner and Western Star branded trucks, as well as a range of used trucks, and maintenance and repair services. In addition, it imports and distributes Western Star heavy-duty trucks, MAN heavy and medium duty trucks, buses, and Dennis Eagle refuse collection vehicles with associated parts in Australia, New Zealand, and portions of the Pacific. Further, the company distributes diesel and gas engines, and power systems. The company operates 320 retail automotive franchises, including 146 franchises located in the United States and 174 franchises located outside of the United States; 23 CarShop used vehicle dealerships in the United States and the United Kingdom; and 37 commercial truck dealerships in Texas, Oklahoma, Tennessee, Georgia, Utah, Idaho, Kansas, Missouri, and Oregon, as well as Canada. Penske Automotive Group, Inc. was incorporated in 1990 and is headquartered in Bloomfield Hills, Michigan.

How the Company Makes Money

Penske Automotive Group generates revenue through multiple streams primarily within its automotive retail operations. The majority of its income comes from the sale of new and used vehicles, which includes significant contributions from finance and insurance products offered to customers at the point of sale. Additionally, PAG earns revenue from service and parts sales, which provide a steady income stream through maintenance and repair services. The company's business model is further bolstered by its leasing operations and the sale of aftermarket products. Strategic partnerships with automobile manufacturers and financial institutions also enhance its revenue-generating capabilities, allowing for competitive financing options and promotions that attract customers. Furthermore, PAG benefits from economies of scale due to its extensive network of dealerships, enabling cost efficiencies that improve profitability.

Penske Automotive Group Financial Statement Overview

Summary

Penske Automotive Group shows strong financial performance with consistent revenue growth and solid profitability. The company maintains a robust cash flow and effective leverage management, despite a slight decrease in EBIT margin.

Income Statement

Penske Automotive Group has demonstrated consistent revenue growth with a TTM revenue of $30.61 billion, up from $30.46 billion annually. The gross profit margin stands at 16.45%, and the net profit margin is 3.1%, indicating strong profitability. Although EBIT margin decreased slightly to 4.26%, the company's ability to maintain solid margins in a competitive industry is commendable.

Balance Sheet

The balance sheet reflects a strong equity position with a debt-to-equity ratio of 0.77, indicating manageable leverage. The equity ratio is 31.85%, showcasing a solid capital structure. Return on equity is 17.57%, highlighting effective use of shareholder funds despite a high debt load.

Cash Flow

The cash flow statement shows robust operating cash flow at $971 million with a free cash flow of $464 million. The company maintains a healthy free cash flow to net income ratio of 0.49, indicating efficient cash generation relative to net income despite a decrease in free cash flow growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	30.58B	30.46B	29.53B	27.81B	25.55B	20.44B
Gross Profit	5.07B	5.01B	4.93B	4.84B	4.44B	3.18B
EBITDA	1.73B	1.68B	1.79B	2.11B	1.82B	980.40M
Net Income	956.80M	918.90M	1.05B	1.38B	1.19B	543.60M
Balance Sheet
Total Assets	17.39B	16.72B	15.67B	14.11B	13.46B	13.25B
Cash, Cash Equivalents and Short-Term Investments	155.30M	72.40M	96.40M	106.50M	100.70M	49.50M
Total Debt	8.41B	8.27B	7.74B	6.95B	6.40B	7.18B
Total Liabilities	11.76B	11.49B	10.92B	9.94B	9.37B	9.92B
Stockholders Equity	5.61B	5.21B	4.73B	4.15B	4.07B	3.30B
Cash Flow
Free Cash Flow	719.70M	811.10M	718.30M	1.18B	1.04B	1.02B
Operating Cash Flow	1.03B	1.18B	1.09B	1.46B	1.29B	1.20B
Investing Cash Flow	-420.60M	-1.04B	-572.30M	-641.70M	-623.10M	-136.50M
Financing Cash Flow	-543.40M	-164.70M	-531.10M	-798.00M	-615.50M	-1.05B

Penske Automotive Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 174.29
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PAG, the sentiment is Negative. The current price of 174.29 is below the 20-day moving average (MA) of 177.48, below the 50-day MA of 178.35, and above the 200-day MA of 164.18, indicating a neutral trend. The MACD of -1.90 indicates Positive momentum. The RSI at 42.94 is Neutral, neither overbought nor oversold. The STOCH value of 81.85 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PAG.

Penske Automotive Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GPI	75 Outperform	$5.77B	12.35	15.72%	0.44%	19.75%	-10.74%
ABG	74 Outperform	$4.98B	9.25	15.19%	―	8.39%	40.35%
LAD	71 Outperform	$8.23B	9.51	13.34%	0.67%	10.25%	9.08%
AN	70 Outperform	$8.46B	14.06	27.24%	―	3.15%	-12.49%
PAG	68 Neutral	$11.55B	12.18	18.11%	2.86%	2.39%	5.84%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
KMX	56 Neutral	$6.77B	13.63	8.42%	―	2.17%	28.59%

Penske Automotive Group Corporate Events

Penske Automotive Reports Strong Q2 2025 Financial Results

Penske Automotive Group reported its second quarter 2025 financial results, highlighting a 3% increase in record gross profit to $1.3 billion and a 4% rise in earnings before taxes to $337 million. Despite flat revenue at $7.7 billion, the company saw a 4% increase in net income attributable to common stockholders, driven by improved gross margins and a strong performance in the retail automotive service and parts sector. The company also repurchased 885,000 shares year-to-date and completed the acquisition of a Ferrari dealership in Italy, reflecting its strategic focus on premium brand mix and geographic diversification.