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AutoNation (AN) Gains But Lags Market: What You Should Know

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In the latest trading session, AutoNation (AN) closed at $111.49, marking a +0.77% move from the previous day. The stock lagged the S&P 500's daily gain of 2.45%. Elsewhere, the Dow gained 2.15%, while the tech-heavy Nasdaq added 0.18%.

Coming into today, shares of the auto retailer had gained 3.01% in the past month. In that same time, the Retail-Wholesale sector gained 0.44%, while the S&P 500 lost 5.71%.

Wall Street will be looking for positivity from AutoNation as it approaches its next earnings report date. The company is expected to report EPS of $5.95, up 23.19% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.87 billion, down 1.59% from the year-ago period.

AN's full-year Zacks Consensus Estimates are calling for earnings of $23.20 per share and revenue of $27.58 billion. These results would represent year-over-year changes of +27.89% and +6.71%, respectively.

Any recent changes to analyst estimates for AutoNation should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. AutoNation currently has a Zacks Rank of #2 (Buy).

In terms of valuation, AutoNation is currently trading at a Forward P/E ratio of 4.77. For comparison, its industry has an average Forward P/E of 5.65, which means AutoNation is trading at a discount to the group.

We can also see that AN currently has a PEG ratio of 0.19. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AN's industry had an average PEG ratio of 0.4 as of yesterday's close.

The Automotive - Retail and Whole Sales industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 19, putting it in the top 8% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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