AutoNation (AN) Gains But Lags Market: What You Should Know
September 9, 2020
AutoNation (AN) closed the most recent trading day at $56.75, moving +1.1% from the previous trading session. The stock lagged the S&P 500’s daily gain of 2.02%. At the same time, the Dow added 1.6%, and the tech-heavy Nasdaq gained 2.71%.
Heading into today, shares of the auto retailer had gained 2.82% over the past month, outpacing the Retail-Wholesale sector’s gain of 1.86% and the S&P 500’s loss of 0.39% in that time.
Investors will be hoping for strength from AN as it approaches its next earnings release. On that day, AN is projected to report earnings of $1.47 per share, which would represent year-over-year growth of 24.58%. Meanwhile, our latest consensus estimate is calling for revenue of $5.19 billion, down 4.9% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.46 per share and revenue of $19.94 billion. These totals would mark changes of +20% and -6.53%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for AN. These revisions help to show the ever-changing nature of 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. 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 has moved 5.23% higher within the past month. AN is currently a Zacks Rank #1 (Strong Buy).
Investors should also note AN’s current valuation metrics, including its Forward P/E ratio of 10.29. Its industry sports an average Forward P/E of 12.16, so we one might conclude that AN is trading at a discount comparatively.
Investors should also note that AN has a PEG ratio of 1.27 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. The Automotive – Retail and Whole Sales industry currently had an average PEG ratio of 1.46 as of yesterday’s close.
The Automotive – Retail and Whole Sales industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 1, which puts it in the top 1% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.