Sonic Automotive Inc (SAH, Financial) has experienced a remarkable surge in its stock price, with a 30.58% gain over the past week and a 23.46% increase over the past three months. The company's market capitalization now stands at $2.19 billion, with the current stock price at $64.31. This recent performance has brought Sonic Automotive's valuation in line with the GF Value of $62, indicating that the stock is now fairly valued, a shift from its previous status as modestly undervalued when the GF Value was at $66.39.
Overview of Sonic Automotive Inc
Sonic Automotive Inc, operating within the Vehicles & Parts industry, is a major auto dealership group in the United States. The company boasts a network of 108 franchised stores across 18 states, 25 EchoPark used-vehicle stores, 16 collision centers, and 13 powersports locations. Sonic Automotive's revenue streams are diverse, with significant contributions from new and used vehicle sales, parts and collision repair, finance, insurance, and wholesale auctions. The luxury and import segments account for a substantial portion of the franchise's new-vehicle revenue, with brands like Honda, BMW, Mercedes, and Toyota leading the pack. In 2023, Sonic Automotive reported a revenue of $14.4 billion, with EchoPark contributing $2.4 billion to this figure. The acquisition of RFJ Auto in December 2021 added an additional $3.2 billion in sales, further bolstering the company's financial standing.
Assessing Sonic Automotive's Profitability
Sonic Automotive's Profitability Rank is an impressive 8 out of 10, reflecting the company's strong financial health and the likelihood of maintaining this status. The Operating Margin stands at 3.50%, surpassing 38.69% of 1,282 companies in the industry. The Return on Equity (ROE) is a robust 20.36%, outperforming 87.67% of its peers, while the Return on Assets (ROA) at 3.48% is better than 50.96% of the industry. The Return on Invested Capital (ROIC) is 8.22%, which is higher than 66.1% of the companies in the same space. Sonic Automotive has also demonstrated consistent profitability over the past decade, with 9 years of profitability, ranking higher than 62.65% of 1,221 companies.
Growth Trajectory of Sonic Automotive
The company's Growth Rank is a stellar 9 out of 10, indicating a strong upward trend in both revenue and profitability. Sonic Automotive's 3-Year Revenue Growth Rate per Share is 20.30%, which is higher than 81.33% of 1,216 companies in the industry. The 5-Year Revenue Growth Rate per Share is 12.50%, outpacing 79.45% of 1,119 companies. Looking ahead, the Total Revenue Growth Rate (Future 3Y To 5Y Est) is projected at 4.19%, which is more favorable than 35.05% of 214 companies. The 3-Year EPS without NRI Growth Rate is 25.50%, and the 5-Year EPS without NRI Growth Rate is an impressive 34.50%, both of which are higher than the majority of their industry counterparts. The EPS Growth Rate (Future 3Y To 5Y Est) is anticipated to be 19.20%, surpassing 66.09% of 115 companies.
Notable Shareholders in Sonic Automotive
Among the significant shareholders of Sonic Automotive, HOTCHKIS & WILEY leads with 891,616 shares, representing a 2.63% stake in the company. Renowned investor Jim Simons (Trades, Portfolio) holds 102,926 shares, accounting for 0.3% of the company's shares, while Paul Tudor Jones (Trades, Portfolio) has a 0.17% stake with 58,185 shares. These prominent investors' confidence in Sonic Automotive may signal a positive outlook for the company's future performance.
Competitive Landscape
When compared to its closest competitors in the Vehicles & Parts industry, Sonic Automotive stands strong. Alpine Auto Brokers Inc (ALTB, Financial) has a market cap of $2.28 billion, Openlane Inc (KAR, Financial) is valued at $1.9 billion, and CarGurus Inc (CARG, Financial) boasts a market cap of $2.51 billion. Sonic Automotive's recent stock performance and growth metrics position it competitively within this group.
Conclusion
In summary, Sonic Automotive Inc's stock performance has been impressive, with significant gains over the past week and three months. The company is currently fairly valued according to the GF Value, reflecting a balanced market perception. Sonic Automotive's strong profitability and growth metrics, coupled with the backing of notable shareholders, suggest a robust business model and promising future prospects. When juxtaposed with its competitors, Sonic Automotive demonstrates a competitive edge in the industry, making it a noteworthy stock for value investors to consider.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
