Beyond The Numbers: 4 Analysts Discuss Sonic Automotive Stock

Sonic Automotive SAH underwent analysis by 4 analysts in the last quarter, revealing a spectrum of viewpoints from bullish to bearish.

The following table encapsulates their recent ratings, offering a glimpse into the evolving sentiments over the past 30 days and comparing them to the preceding months.

In the assessment of 12-month price targets, analysts unveil insights for Sonic Automotive, presenting an average target of $80.5, a high estimate of $100.00, and a low estimate of $74.00. This current average reflects an increase of 8.3% from the previous average price target of $74.33.

Decoding Analyst Ratings: A Detailed Look

In examining recent analyst actions, we gain insights into how financial experts perceive Sonic Automotive. The following summary outlines key analysts, their recent evaluations, and adjustments to ratings and price targets.

Key Insights:

• Action Taken: Analysts respond to changes in market conditions and company performance, frequently updating their recommendations. Whether they 'Maintain', 'Raise' or 'Lower' their stance, it reflects their reaction to recent developments related to Sonic Automotive. This information offers a snapshot of how analysts perceive the current state of the company.
• Rating: Analysts assign qualitative assessments to stocks, ranging from 'Outperform' to 'Underperform'. These ratings convey the analysts' expectations for the relative performance of Sonic Automotive compared to the broader market.
• Price Targets: Analysts predict movements in price targets, offering estimates for Sonic Automotive's future value. Examining the current and prior targets offers insights into analysts' evolving expectations.

Understanding these analyst evaluations alongside key financial indicators can offer valuable insights into Sonic Automotive's market standing. Stay informed and make well-considered decisions with our Ratings Table.

Stay up to date on Sonic Automotive analyst ratings.

Delving into Sonic Automotive's Background

Sonic Automotive is one of the largest auto dealership groups in the United States. The company has 108 franchised stores in 18 states, primarily in metropolitan areas in California, Texas, and the Southeast, plus 25 EchoPark used-vehicle stores, 16 collision centers, and 13 powersports locations. The franchise stores derive revenue from new and used vehicles plus parts and collision repair, finance, insurance, and wholesale auctions. Luxury and import dealerships make up about 86% of franchise new-vehicle revenue, while Honda, BMW, Mercedes, and Toyota constitute about 58% of new-vehicle revenue. BMW is the largest brand at about 25%. 2023's revenue was $14.4 billion, with EchoPark's portion totaling $2.4 billion. Sonic bought RFJ Auto in December 2021, which added $3.2 billion in sales.

Sonic Automotive's Financial Performance

Market Capitalization: With restricted market capitalization, the company is positioned below industry averages. This reflects a smaller scale relative to peers.

Negative Revenue Trend: Examining Sonic Automotive's financials over 3 months reveals challenges. As of 30 September, 2024, the company experienced a decline of approximately -4.17% in revenue growth, reflecting a decrease in top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Consumer Discretionary sector.

Net Margin: Sonic Automotive's financial strength is reflected in its exceptional net margin, which exceeds industry averages. With a remarkable net margin of 2.13%, the company showcases strong profitability and effective cost management.

Return on Equity (ROE): The company's ROE is a standout performer, exceeding industry averages. With an impressive ROE of 7.57%, the company showcases effective utilization of equity capital.

Return on Assets (ROA): Sonic Automotive's financial strength is reflected in its exceptional ROA, which exceeds industry averages. With a remarkable ROA of 1.28%, the company showcases efficient use of assets and strong financial health.

Debt Management: Sonic Automotive's debt-to-equity ratio is below the industry average at 4.03, reflecting a lower dependency on debt financing and a more conservative financial approach.

The Basics of Analyst Ratings

Analyst ratings serve as essential indicators of stock performance, provided by experts in banking and financial systems. These specialists diligently analyze company financial statements, participate in conference calls, and engage with insiders to generate quarterly ratings for individual stocks.

Some analysts publish their predictions for metrics such as growth estimates, earnings, and revenue to provide additional guidance with their ratings. When using analyst ratings, it is important to keep in mind that stock and sector analysts are also human and are only offering their opinions to investors.

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This article was generated by Benzinga's automated content engine and reviewed by an editor.