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

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AutoNation (AN - Free Report) closed the most recent trading day at $65.92, moving -0.27% from the previous trading session. This change lagged the S&P 500's daily gain of 0.18%. At the same time, the Dow lost 0.15%, and the tech-heavy Nasdaq gained 0.5%.

Prior to today's trading, shares of the auto retailer had gained 6.66% over the past month. This has outpaced the Retail-Wholesale sector's gain of 1.34% and the S&P 500's gain of 3.22% in that time.

Wall Street will be looking for positivity from AN as it approaches its next earnings report date. The company is expected to report EPS of $2.01, up 53.44% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $5.56 billion, up 0.29% from the year-ago period.

AN's full-year Zacks Consensus Estimates are calling for earnings of $6.71 per share and revenue of $20.17 billion. These results would represent year-over-year changes of +47.47% and -5.46%, respectively.

Investors should also note any recent changes to analyst estimates for AN. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 2.74% higher within the past month. AN is holding a Zacks Rank of #2 (Buy) right now.

Investors should also note AN's current valuation metrics, including its Forward P/E ratio of 9.86. Its industry sports an average Forward P/E of 10.77, so we one might conclude that AN is trading at a discount comparatively.

It is also worth noting that AN currently has a PEG ratio of 1.02. 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 was holding an average PEG ratio of 1.02 at yesterday's closing price.

The Automotive - Retail and Whole Sales industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 7, putting it in the top 3% 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.

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