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AutoNation (AN) Gains But Lags Market: What You Should Know

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In the latest trading session, AutoNation (AN - Free Report) closed at $68.05, marking a +0.1% move from the previous day. The stock lagged the S&P 500's daily gain of 0.35%. At the same time, the Dow added 0.23%, and the tech-heavy Nasdaq gained 0.26%.

Coming into today, shares of the auto retailer had gained 7.33% in the past month. In that same time, the Retail-Wholesale sector gained 1.22%, while the S&P 500 gained 3.27%.

Wall Street will be looking for positivity from AN as it approaches its next earnings report date. In that report, analysts expect AN to post earnings of $2.01 per share. This would mark year-over-year growth of 53.44%. Our most recent consensus estimate is calling for quarterly revenue of $5.56 billion, up 0.29% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.71 per share and revenue of $20.17 billion, which would represent changes of +47.47% and -5.46%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for AN. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 1.19% higher within the past month. AN is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, AN is holding a Forward P/E ratio of 10.14. This represents a discount compared to its industry's average Forward P/E of 10.16.

Meanwhile, AN's PEG ratio is currently 1.05. 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 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 18, which puts it in the top 8% 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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