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AutoNation (AN) Gains As Market Dips: What You Should Know

·3 min read

AutoNation (AN) closed at $107.54 in the latest trading session, marking a +0.02% move from the prior day. This change outpaced the S&P 500's 1.71% loss on the day. Elsewhere, the Dow lost 1.7%, while the tech-heavy Nasdaq lost 0.09%.

Prior to today's trading, shares of the auto retailer had lost 13.86% over the past month. This has lagged the Retail-Wholesale sector's loss of 7.43% and the S&P 500's loss of 8.68% in that time.

AutoNation will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $6.41, up 25.2% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $6.78 billion, up 6.27% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $24.74 per share and revenue of $27.2 billion, which would represent changes of +36.38% and +5.25%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for AutoNation. Recent revisions tend to reflect the latest near-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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. AutoNation is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, AutoNation is holding a Forward P/E ratio of 4.35. For comparison, its industry has an average Forward P/E of 4.82, which means AutoNation is trading at a discount to the group.

Meanwhile, AN's PEG ratio is currently 0.62. 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. The Automotive - Retail and Whole Sales industry currently had an average PEG ratio of 0.58 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 56, putting it in the top 23% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

To follow AN in the coming trading sessions, be sure to utilize Zacks.com.


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