We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
AutoNation (AN - Free Report) is a Zacks Rank #1 (Strong Buy) that is the largest automotive retailer in the United States. The company offers vehicle maintenance and repair services, vehicle parts, extended service contracts, vehicle protection products, and other aftermarket products.
About the Company
Auto Nation employs over 21,000 and is headquartered in Fort Lauderdale, FL. The company was founded in 1991 and at the end of 2020, operated 315 new vehicle franchises from 230 stores located primarily in metropolitan markets in the Sunbelt region.
AutoNation’s business is divided into three operating segments — Domestic (33% of revenues in 2020), Import (30.4%) and Premium Luxury (36.6%).
AN is valued at $7.5 billion and has a Forward PE of 9. The company holds a Zacks Style Score of “A” in Value, but “D” in Momentum.
Q1 Earnings and Price Action
In late April, the company reported strong earnings, seeing beats on both the top and bottom lines. Q1 came on at $2.85 v the $1.80 expected, a 55% beat above Zacks estimates. Revenues came in at $5.9B v the $5.06B expected.
The company saw big year over year numbers:
- New vehicle unit sales +22% y/y
- Retail used vehicle unit sales +28% y/y
- Wholesale Rev +21.1% y/y
- Used vehicle sales +40.1% y/y
- Finance and insurance +32.7% y/y
While these were bounce back numbers from when COVID started to shutter things a year ago, they are impressive nonetheless. The earning beat was the ninth straight, which has helped drive the stock over 90 % higher since he beginning of 2020.
The earnings momentum looks to continue as we head into next quarter. Over the last 90 days, estimates are headed higher. For next quarter, estimates have gone from $1.93 to $2.37, or up 23%. For the current year, estimates have ticked 37% higher, from $7.48 to $10.15.
The company will report on July 20th, with the consensus at $2.53. This is a slight downtick from the $2.54 expected, but recent strength in the car market could bring better than expected numbers.
Industry Strength
Seasonality in Q2 usually means new car sales volumes are trending higher and data from earlier in the quarter showed just that, with April SAAR numbers coming in high. Pricing has alos remained very strong, especially for the used car market which saw a 62% uptick in April year over year.
While production issues are bringing lower volumes, car dealers are able to sell above sticker price. This creates a negative short-term outlook that has stalled earnings estimates. However, a positive earnings number will prove Auto Nation’s ability to manage the tight supply could be a tailwind for stock in the back half of the year.
The Technical Take
After pulling back about 8% from 2021 highs, the stock has rallied back to the 21-day moving average. Still up 35% on the year, investors will likely hold the stock at current levels until earnings come out.
If the bullish case plays out, look for the stock to pop above the 50-day at $99 and continue to all-time highs at $108.
However, if the bearish scenario hits earnings and the company failed to navigate the inventory issue, look for a break down to the 200-day. Bulls should step in at that level, which is $79
In Summary
Earnings on deck and investors should expect an EPS beat despite current issues with inventories. Even if the company shows difficulty with this past quarter, the future is looking bright as the auto shortfall surpasses next year. Bulls should be on the lookout for any dips or looking to buy the break back over $100 and ride the stock to all-time highs.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
Bull of the Day: AutoNation (AN)
AutoNation (AN - Free Report) is a Zacks Rank #1 (Strong Buy) that is the largest automotive retailer in the United States. The company offers vehicle maintenance and repair services, vehicle parts, extended service contracts, vehicle protection products, and other aftermarket products.
About the Company
Auto Nation employs over 21,000 and is headquartered in Fort Lauderdale, FL. The company was founded in 1991 and at the end of 2020, operated 315 new vehicle franchises from 230 stores located primarily in metropolitan markets in the Sunbelt region.
AutoNation’s business is divided into three operating segments — Domestic (33% of revenues in 2020), Import (30.4%) and Premium Luxury (36.6%).
AN is valued at $7.5 billion and has a Forward PE of 9. The company holds a Zacks Style Score of “A” in Value, but “D” in Momentum.
Q1 Earnings and Price Action
In late April, the company reported strong earnings, seeing beats on both the top and bottom lines. Q1 came on at $2.85 v the $1.80 expected, a 55% beat above Zacks estimates. Revenues came in at $5.9B v the $5.06B expected.
The company saw big year over year numbers:
- New vehicle unit sales +22% y/y
- Retail used vehicle unit sales +28% y/y
- Wholesale Rev +21.1% y/y
- Used vehicle sales +40.1% y/y
- Finance and insurance +32.7% y/y
While these were bounce back numbers from when COVID started to shutter things a year ago, they are impressive nonetheless. The earning beat was the ninth straight, which has helped drive the stock over 90 % higher since he beginning of 2020.
AutoNation, Inc. Price and EPS Surprise
AutoNation, Inc. price-eps-surprise | AutoNation, Inc. Quote
Estimates Headed Higher into Earnings
The earnings momentum looks to continue as we head into next quarter. Over the last 90 days, estimates are headed higher. For next quarter, estimates have gone from $1.93 to $2.37, or up 23%. For the current year, estimates have ticked 37% higher, from $7.48 to $10.15.
The company will report on July 20th, with the consensus at $2.53. This is a slight downtick from the $2.54 expected, but recent strength in the car market could bring better than expected numbers.
Industry Strength
Seasonality in Q2 usually means new car sales volumes are trending higher and data from earlier in the quarter showed just that, with April SAAR numbers coming in high. Pricing has alos remained very strong, especially for the used car market which saw a 62% uptick in April year over year.
While production issues are bringing lower volumes, car dealers are able to sell above sticker price. This creates a negative short-term outlook that has stalled earnings estimates. However, a positive earnings number will prove Auto Nation’s ability to manage the tight supply could be a tailwind for stock in the back half of the year.
The Technical Take
After pulling back about 8% from 2021 highs, the stock has rallied back to the 21-day moving average. Still up 35% on the year, investors will likely hold the stock at current levels until earnings come out.
If the bullish case plays out, look for the stock to pop above the 50-day at $99 and continue to all-time highs at $108.
However, if the bearish scenario hits earnings and the company failed to navigate the inventory issue, look for a break down to the 200-day. Bulls should step in at that level, which is $79
In Summary
Earnings on deck and investors should expect an EPS beat despite current issues with inventories. Even if the company shows difficulty with this past quarter, the future is looking bright as the auto shortfall surpasses next year. Bulls should be on the lookout for any dips or looking to buy the break back over $100 and ride the stock to all-time highs.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>