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AutoNation
(NYSE:AN)
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Rating:69Neutral
Price Target:
$236.00
▲(13.36% Upside)
Action:Reiterated
Date:08/04/26
The score is held back most by weaker underlying financial performance (TTM revenue decline, margin compression, and near-breakeven TTM free cash flow), despite balance-sheet improvement. Offsetting this, technicals are constructive with price above major moving averages, valuation looks attractive at ~9.8x earnings, and the latest earnings call was broadly positive with reiterated guidance, strong adjusted free cash flow, and continued buybacks.
Positive Factors
Aftersales recurring revenue strength
Record aftersales gross profit and rising customer-pay revenue indicate a durable, higher-margin recurring earnings stream. Aftersales is less cyclical than new-vehicle retailing, supports margin stability, and cushions cash flow volatility from vehicle sales swings over the medium term.
Negative Factors
TTM revenue decline and margin compression
A sizable TTM revenue decline with step-down in net margin signals weaker demand and margin pressure across the business. If sustained, lower top-line and compressed margins constrain cash flow, limit reinvestment, and make earnings more sensitive to cyclical downturns over the next several months.
Read all positive and negative factors
Positive Factors
Negative Factors
Aftersales recurring revenue strength
Record aftersales gross profit and rising customer-pay revenue indicate a durable, higher-margin recurring earnings stream. Aftersales is less cyclical than new-vehicle retailing, supports margin stability, and cushions cash flow volatility from vehicle sales swings over the medium term.
Read all positive factors
AutoNation (AN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.92B
Dividend YieldN/A
Average Volume (3M)383.59K
Price to Earnings (P/E)9.5
Beta (1Y)0.77
Revenue Growth-0.06%
EPS Growth35.87%
CountryUS
Employees24,800
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)22.03
Shares Outstanding33,060,806
10 Day Avg. Volume349,419
30 Day Avg. Volume383,594
Financial Highlights & Ratios
PEG Ratio-41.42
Price to Book (P/B)3.36
Price to Sales (P/S)0.28
P/FCF Ratio-39.83
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$243.60Price Target Upside17.01% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
EPS Forecast (FY)21.79
Revenue Forecast (FY)$27.78B
AutoNation Business Overview & Revenue Model
Company Description
AutoNation, Inc. functions as an automotive retailer throughout the United States, organizing its operations across three primary segments: Domestic, Import, and Premium Luxury. The company offers a comprehensive array of automotive products and s...
How the Company Makes Money
AutoNation primarily makes money by generating revenue and gross profit across several dealership-related streams: (1) New vehicle sales: AutoNation sells new cars and light trucks through franchised dealerships. Revenue is recognized from vehicle...
AutoNation Earnings Call Summary
Earnings Call Date:Jul 31, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call presented a broadly positive operational and financial picture: strong and growing high-margin aftersales and CFS businesses, accelerating AutoNation Finance scale and profitability, robust free cash flow and meaningful share repurchases driving share count reduction and EPS growth. Headwinds included lower new vehicle volumes driven by BEV weakness, some compression in new vehicle per-unit profit versus the prior year, and mix-related margin impacts (wholesale parts growth is high-revenue but lower-margin). Management highlighted clear plans and progress on SG&A improvement, technician hiring, parts wholesale scaling, and disciplined capital allocation. On balance, the positive cash generation, durable recurring aftersales earnings and the scaling finance business outweigh the headwinds outlined on the call.Positive Updates
Continued EPS Growth
Adjusted EPS of $5.56 for Q2 2026, up from $5.46 a year ago (≈+1.8%), marking the sixth consecutive quarter of year-over-year adjusted EPS growth.
Negative Updates
Slight Decline in Total Gross Profit and Operating Income
Total gross profit was $1.23B in Q2 2026 versus $1.28B a year ago (≈-3.9% YoY). Adjusted operating income was $343M versus $369M a year ago (≈-7% YoY), reflecting tariff/BEV headwinds and mix shifts.
Read all updates
Q2-2026 Updates
Positive
Negative
Continued EPS Growth
Adjusted EPS of $5.56 for Q2 2026, up from $5.46 a year ago (≈+1.8%), marking the sixth consecutive quarter of year-over-year adjusted EPS growth.
Read all positive updates
Company Guidance
On the call management reiterated guidance for the second half and full year: SG&A should improve to a run‑rate of roughly 66%–67% of gross profit by year‑end, adjusted EPS is expected to grow in H2, and full‑year CapEx is targeted at about $325 million. They highlighted strong cash generation — adjusted free cash flow was $439M YTD (125% conversion) with >$180M in Q2 — and disciplined capital deployment (H1 buybacks $457M, M&A $317M, acquisitions adding ~$600M in annual revenue and ~9,700 units); covenant leverage remains comfortably inside the 2x–3x EBITDA target. Operationally they expect aftersales to deliver mid‑single‑digit customer‑pay gross profit growth, AutoNation Finance to keep scaling (portfolio $2.67B, 91% debt funded, $11M Q2 profit, $485M originations, 11% penetration of sales), off‑lease/lease returns to accelerate in H2 (up ~30%–40%), and overall unit volumes to track market SAARs while sustaining margin profiles (Q2: total gross margin ~17.8%, adj. operating income $343M/~5% margin; new GPU ~$2,381; used GPU ~$1,582).AutoNation Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
70
Positive
Cash Flow
35
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 27.45B | 27.63B | 26.77B | 26.95B | 26.98B | 25.84B |
| Gross Profit | 4.90B | 4.95B | 4.79B | 5.13B | 5.27B | 4.95B |
| EBITDA | 1.63B | 1.58B | 1.60B | 1.92B | 2.21B | 2.12B |
| Net Income | 774.70M | 649.10M | 692.20M | 1.02B | 1.38B | 1.37B |
Balance Sheet | ||||||
| Total Assets | 15.48B | 14.39B | 13.00B | 11.98B | 10.06B | 8.94B |
| Cash, Cash Equivalents and Short-Term Investments | 123.90M | 58.60M | 101.50M | 60.80M | 72.60M | 60.40M |
| Total Debt | 11.33B | 10.18B | 8.65B | 8.12B | 6.42B | 4.95B |
| Total Liabilities | 13.23B | 12.05B | 10.54B | 9.77B | 8.01B | 6.57B |
| Stockholders Equity | 2.26B | 2.34B | 2.46B | 2.21B | 2.05B | 2.38B |
Cash Flow | ||||||
| Free Cash Flow | 12.10M | -197.50M | -13.80M | 313.70M | 1.34B | 1.41B |
| Operating Cash Flow | 293.30M | 111.90M | 314.70M | 724.00M | 1.67B | 1.63B |
| Investing Cash Flow | -904.40M | -687.00M | 12.30M | -569.90M | -479.30M | -460.30M |
| Financing Cash Flow | 646.10M | 557.50M | -300.60M | -172.50M | -1.15B | -1.68B |
AutoNation Technical Analysis
Positive
208.18
Price Trends
199.72
Positive
198.35
Positive
201.09
Positive
Market Momentum
2.63
Positive
52.88
Neutral
27.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AN, the sentiment is Positive. The current price of 208.18 is below the 20-day moving average (MA) of 210.78, above the 50-day MA of 199.72, and above the 200-day MA of 201.09, indicating a neutral trend. The MACD of 2.63 indicates Positive momentum. The RSI at 52.88 is Neutral, neither overbought nor oversold. The STOCH value of 27.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AN.
AutoNation Risk Analysis
AutoNation disclosed 16 risk factors in its most recent earnings report. AutoNation 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
AutoNation Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $6.92B | 9.51 | 33.18% | ― | -0.06% | 35.87% | |
66 Neutral | $8.30B | 12.46 | 10.91% | 0.65% | 1.97% | -10.60% | |
66 Neutral | $14.44B | 16.19 | 16.43% | 2.54% | 4.13% | -5.43% | |
65 Neutral | $3.78B | 7.87 | 13.04% | ― | 4.12% | -2.47% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
60 Neutral | $8.50B | 37.22 | 3.67% | ― | -1.69% | -58.01% | |
53 Neutral | $3.15B | 10.97 | 9.96% | 0.63% | 0.81% | -33.60% |
* Consumer Cyclical Sector Average
AN
AutoNation
209.41
2.23
1.08%
ABG
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210.66
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KMX
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59.92
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GPI
Group 1 Automotive
263.95
-179.28
-40.45%
LAD
Driveway Vehicle Solutions
377.55
75.34
24.93%
PAG
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219.85
45.13
25.83%
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.