We believe AutoNation's massive size and economy of scale advantages will allow the company to deliver operating margins often above 4%, and we see upside potential to profits as its AutoNation USA stand-alone used-vehicle stores roll out. There are 23 USA stores as of first-quarter 2024, and long term we expect over 100.
AutoNation's massive size provides some appealing economies of scale, illustrated by strong operating margins.
About half of revenue is derived from new-car sales, leaving AutoNation vulnerable to the fluctuations of a viciously cyclical industry. This risk is greater for AutoNation as it gets a much larger share of its sales from California and Florida than the national average. These markets could be hit worse than other U.S. markets in a housing downturn.
|
Metric
|
AN
|
KMX
|
BRK.B
|
|---|---|---|---|
Price/Earnings (Normalized) | 7.47 | 28.47 | 21.73 |
Price/Book Value | 2.81 | 1.85 | 1.53 |
Price/Sales | 0.26 | 0.44 | 2.15 |
Price/Cash Flow | 5.68 | 9.61 | 23.72 |
|
Metric
|
AN
|
KMX
|
BRK.B
|
|---|---|---|---|
Quick Ratio | 0.17 | 0.22 | — |
Current Ratio | 0.79 | 2.50 | — |
Interest Coverage | 4.48 | −0.48 | 18.86 |
|
Metric
|
AN
|
KMX
|
BRK.B
|
|---|---|---|---|
Return on Assets (Normalized) | 8.24% | 1.84% | 3.90% |
Return on Equity (Normalized) | 43.15% | 8.32% | 7.49% |
Return on Invested Capital (Normalized) | 12.50% | −0.74% | 6.61% |
|
1-Day Chart
|
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Price
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Morningstar Rating for Stocks
|
Capital Allocation
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Economic Moat
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Market Cap
|
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CVNA
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SIETY
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SIEVF
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PAG
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LAD
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