Sonic Automotive (SAH) AI Stock Analysis

• Market Cap: $2.13B
• Dividend Yield: 2.07%
• Average Volume (3M): 306.39K
• Price to Earnings (P/E): 8.9
• Beta (1Y): 0.95
• Revenue Growth: 1.59%
• EPS Growth: 43.91%
• Country: US
• Employees: 10,800
• Sector: Consumer Cyclical
• Sector Strength: 59
• Industry: Auto - Dealerships
• EPS (TTM): 7.01
• Shares Outstanding: 21,931,620
• 10 Day Avg. Volume: 237,914
• 30 Day Avg. Volume: 306,392
• PEG Ratio: 0.20
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 2.80
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 2.72
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $71.43
• Price Target Upside: 13.85% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

Sonic Automotive's overall stock score is 68, reflecting its robust revenue growth and strategic initiatives, particularly in the EchoPark segment. The company's high leverage and bearish technical indicators are key risks. However, its potential undervaluation and dividend yield provide a balanced investment proposition. Continued strategic focus and operational efficiency will be critical for maintaining momentum.

Positive Factors

Earnings and sales performance

Total franchised same-store sales increased driven primarily by strong new vehicle sales and F&I growth.

Echo Park segment performance

The Echo Park segment is showing encouraging results and maintaining unit guidance growth despite elevated uncertainty.

Growth potential

SAH's Echo Park segment is poised for durable, secular growth leveraging SAH's unique pricing strategy.

Negative Factors

Franchise business outlook

Sonic understandably suspended a few aspects of its 2025 outlook and adjusted others due to growing uncertainty around the macro environment.

Performance and expectations

SAH printed a weaker than expected performance for their Echo Park segment.

Regulatory challenges

Regulatory headwinds from new vehicle tariffs are driving elevated uncertainty and potentially dampening unit enthusiasm.

Sonic Automotive Business Overview & Revenue Model

Company Description

Sonic Automotive, Inc. operates as an automotive retailer in the United States. It operates in two segments, Franchised Dealerships and EchoPark. The Franchised Dealerships segment is involved in the sale of new and used cars and light trucks, and replacement parts; provision of vehicle maintenance, manufacturer warranty repair, and paint and collision repair services; and arrangement of extended warranties, service contracts, financing, insurance, and other aftermarket products for its guests. The EchoPark segment sells used cars and light trucks; and arranges finance and insurance product sales for its guests in pre-owned vehicle specialty retail locations. As of December 31, 2021, the company operated 140 new vehicle franchises representing 28 brands of cars and light trucks; 17 collision repair centers in 17 states; and 46 EchoPark stores in 16 states, including 11 Northwest Motorsport pre-owned vehicle stores. Sonic Automotive, Inc. was incorporated in 1997 and is based in Charlotte, North Carolina.

How the Company Makes Money

Sonic Automotive generates revenue through several key streams. The primary source of income is the sale of new and used vehicles across its network of franchised dealerships and EchoPark locations. In addition to vehicle sales, the company earns significant revenue from its service and parts operations, which provide maintenance and repair services as well as replacement parts to customers. Financial services, including the arrangement of vehicle financing, insurance products, and extended service contracts, also contribute to the company's earnings. Partnerships with automotive manufacturers, financial institutions, and other service providers enhance Sonic Automotive's ability to offer competitive financing and insurance options, supporting its overall revenue generation strategy.

Sonic Automotive Financial Statement Overview

Summary

Sonic Automotive has demonstrated strong revenue growth, particularly in the EchoPark segment, and improved cash flow management. However, the high leverage and declining profit margins pose potential risks, necessitating a focus on operational efficiency and debt management.

Income Statement

Sonic Automotive shows strong revenue growth, with a notable increase of approximately 48% from 2020 to 2025. The gross profit margin remains stable, indicating efficient cost management despite fluctuations. However, the net profit margin and EBIT margin have decreased over the years, suggesting potential challenges in managing operational expenses or changes in market conditions.

Balance Sheet

The company's debt-to-equity ratio indicates high leverage, which could pose risks if market conditions worsen. There is a positive trend in stockholders' equity, but the equity ratio remains relatively low, reflecting a high reliance on debt financing. Return on equity has improved, demonstrating more effective use of equity capital in generating profits.

Cash Flow

Sonic Automotive has shown significant improvement in free cash flow from 2024 to 2025, moving from negative to positive, indicating better cash management. The operating cash flow to net income ratio is strong, suggesting effective cash conversion. However, the free cash flow to net income ratio tends to fluctuate, which could impact long-term financial stability.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
14.22B	14.37B	14.00B	12.40B	9.77B
	Gross Profit
2.19B	2.25B	2.32B	1.91B	1.42B
	EBIT
461.50M	423.60M	634.60M	538.40M	304.05M
	EBITDA
605.10M	558.60M	441.00M	622.50M	125.40M
	Net Income Common Stockholders
216.00M	178.20M	88.50M	348.90M	-50.66M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
44.00M	28.90M	229.20M	299.40M	170.31M
	Total Assets
5.90B	5.36B	4.98B	4.98B	3.75B
	Total Debt
4.13B	3.86B	3.49B	3.32B	2.45B
	Net Debt
4.08B	3.83B	3.26B	3.02B	2.28B
	Total Liabilities
4.83B	4.47B	4.08B	3.90B	2.93B
	Stockholders Equity
1.06B	891.90M	895.20M	1.08B	814.80M
Cash Flow		Free Cash Flow
-78.10M	-219.30M	179.00M	8.10M	153.90M
	Operating Cash Flow
109.20M	-15.70M	406.10M	306.30M	281.08M
	Investing Cash Flow
-178.30M	-218.70M	-299.70M	-1.30B	-100.18M
	Financing Cash Flow
84.30M	34.10M	-176.60M	624.80M	-39.69M

Sonic Automotive Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 62.74
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SAH, the sentiment is Positive. The current price of 62.74 is above the 20-day moving average (MA) of 59.53, above the 50-day MA of 61.53, and above the 200-day MA of 61.77, indicating a bullish trend. The MACD of 0.19 indicates Negative momentum. The RSI at 58.23 is Neutral, neither overbought nor oversold. The STOCH value of 82.08 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SAH.

Sonic Automotive Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAG	77 Outperform	$10.41B	11.45	18.57%	2.82%	3.29%	-1.30%
AN	74 Outperform	$6.49B	9.75	28.45%	―	-0.24%	-19.76%
ABG	74 Outperform	$4.37B	10.58	11.92%	―	11.11%	-23.41%
LAD	73 Outperform	$7.72B	9.34	12.95%	0.71%	12.96%	-6.25%
GPI	73 Outperform	$5.33B	11.61	16.25%	0.46%	15.13%	-15.91%
SAH	68 Neutral	$2.13B	8.95	24.52%	2.07%	1.59%	43.91%
Sector *	61 Neutral	$6.65B	11.71	3.09%	3.98%	2.65%	-20.82%

Sonic Automotive Corporate Events

Sonic Automotive Reports Strong Q1 2025 Financial Performance

On April 24, 2025, Sonic Automotive reported a strong financial performance for the first quarter of 2025, with record revenues of $3.7 billion, an 8% increase year-over-year, and a significant rise in net income by 68% to $70.6 million. The EchoPark segment achieved all-time record gross profit and segment income, marking a 455% improvement from the previous year. Despite uncertainties related to tariffs, Sonic Automotive remains focused on expanding its market share and optimizing its operations to sustain long-term growth and shareholder value.

Spark’s Take on SAH Stock

According to Spark, TipRanks’ AI Analyst, SAH is a Neutral.

Sonic Automotive’s overall performance is moderate with key strengths in revenue generation and strategic initiatives. However, high financial leverage and cash flow challenges pose significant risks. The technical analysis shows a bearish trend, but valuation metrics suggest potential undervaluation. The earnings call indicates positive future growth prospects despite some current challenges.

To see Spark’s full report on SAH stock, click here.

Sonic Automotive Achieves Record Financial Results in 2024

Sonic Automotive reported record financial results for the fourth quarter and full year of 2024, with quarterly revenues reaching an all-time high of $3.9 billion and annual revenues at $14.2 billion. Despite a slight annual revenue decline, the company saw significant improvements in profitability, particularly in its EchoPark segment, which achieved a substantial turnaround in adjusted EBITDA. The company also exceeded its technician hiring goals and made strategic acquisitions expected to bolster future revenues. The approval of a quarterly cash dividend reflects Sonic’s robust financial health and commitment to shareholder returns.

Sonic Automotive Announces Executive Compensation Plans

On February 5, 2025, Sonic Automotive’s Compensation Committee outlined performance-based cash bonuses and restricted stock units for its executive officers. The performance-based incentives are tied to adjusted earnings per share and customer satisfaction goals for the 2025 calendar year, with the evaluation taking place by March 15, 2026. Additionally, base salaries for the executive officers were retroactively increased from January 1, 2025, reflecting the company’s commitment to aligning executive compensation with performance metrics.