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Can AutoNation (AN) Post 8th Straight Earnings Record in Q1?
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AutoNation (AN - Free Report) is slated to release first-quarter 2022 results on Apr 21, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is pegged at $5.39 per share and $6.63 billion, respectively.
The auto retailer came up with better-than-expected results in the last reported quarter on higher-than-anticipated profits from new and used vehicle sales. In fact, AN posted the seventh consecutive all-time record EPS in fourth-quarter 2021. The company surpassed earnings estimates in the trailing four quarters, with the average being 39.3%. Investors expect AN to maintain its earnings beat streak for the first quarter of 2022 as well. Encouragingly, our model also predicts the same.
The Zacks Consensus Estimate for AutoNation’s first-quarter earnings per share has been revised upward by 7 cents in the past 30 days. The bottom-line projection implies a year-over-year jump of 93.2%. Also, the Zacks Consensus Estimate for revenues suggests a year-over-year uptick of 12.3%.
Our proven model predicts an earnings beat for AutoNation for the to-be-reported quarter, as it has the right combination of the two key ingredients. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: AutoNation has an Earnings ESP of +0.58%. This is because the Most Accurate Estimate is pegged 4 cents above the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Courtesy of economic recovery from the pandemic lows and preference for personal mobility, demand for vehicles has been on the rise, which is likely to have aided sales of AutoNation. During the last reported quarter, AutoNation acquired 11 stores and a collision center from Peacock Automotive Group. The auto retailer also completed the acquisition of Priority 1 Automotive Group, which added nine Maryland dealerships to AutoNation’s portfolio. These buyouts are likely to have contributed to AutoNation’s first-quarter 2022 sales.
Even though tight inventory may have played a spoilsport to some extent, the rising average selling price for new and used cars amid supply-demand mismatch is likely to have fueled first-quarter revenues.
AN’s digital platform AutoNation Express stepped up its digitization game, which is expected to have aided sales in the quarter. Increased focus on cost discipline is anticipated to have aided first-quarter margins. Over the past few quarters, the firm’s adjusted selling, general & administrative expenses as a percentage of gross profit have been declining. The metric came in at 57.2% in the last reported quarter, representing a 710-basis point improvement year over year. The trend is expected to have continued in first-quarter 2022 as well.
Key Segmental Predictions
Below we have highlighted chief predictions for AutoNation’s segments. The Zacks Consensus Estimate for total retail vehicle sales for the quarter to be reported is pegged at 149,750 units, indicating an increase from 141,141 in the year-ago period, primarily led by used-vehicle sales growth.
The consensus estimate for used vehicle retail sales stands at 74,078 units, implying an uptick from 71,780 units in first-quarter 2021. The consensus mark for revenues and gross profit from used-vehicle sales is pegged at $2,229 million and $170 million, suggesting growth from the year-ago levels of $1,749 million and $140 million, respectively.
The consensus estimate for new vehicle retail sales stands at 75,672 units, implying an uptick from 69,361 units in first-quarter 2021. The consensus mark for revenues and gross profit from used-vehicle sales is pegged at $3,056 million and $389 million, suggesting growth from the year-ago levels of $2,982 million and $190 million, respectively.
The consensus mark for revenues and gross profits from the Parts and Services segment is pegged at $959 million and $438 million, implying year-over-year growth of 12.7% and 12.6%, respectively. The same for revenues and gross profits from the Finance & Insurance unit stands at $366 million and $391 million, implying growth from 16.9% and 24.9% a year ago, respectively.
Higher year-over-year projected gross profit across all business operations — new and vehicle sales, parts and services, and finance and insurance — is likely to aid the upcoming results.
Other Stocks With Favorable Combination
Here are a few other stocks in the auto space, which, according to our model, also have the right combination of elements to post an earnings beat for the quarter to be reported:
Allison Transmission (ALSN - Free Report) has an Earnings ESP of +10.35% and a Zacks Rank #3. The stock is set to report first-quarter 2022 earnings on Apr 27.
The Zacks Consensus Estimate for Allison’s to-be-reported quarter’s earnings and revenues is pegged at $1.16 per share and $642 million, respectively. Encouragingly, ALSN surpassed earnings estimates in the last four quarters, with an average of 13.4%.
LKQ Corp (LKQ - Free Report) has an Earnings ESP of +0.37% and a Zacks Rank #3. The stock is set to report first-quarter 2022 earnings on Apr 28.
The Zacks Consensus Estimate for LKQ’s to-be-reported quarter’s earnings and revenues is pegged at 91 cents per share and $3.28 billion, respectively. Encouragingly, LKQ surpassed earnings estimates in the last four quarters, with an average of 33.9%.
Cummins, Inc. (CMI - Free Report) has an Earnings ESP of +1.68% and a Zacks Rank #3. The stock is set to report first-quarter 2022 earnings on May 3.
The Zacks Consensus Estimate for Cummins’ to-be-reported quarter’s earnings and revenues is pegged at $3.55 per share and $6.02 billion, respectively. Over the trailing four quarters, CMI surpassed earnings estimates twice for as many misses, with an average surprise of 0.5%.
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Can AutoNation (AN) Post 8th Straight Earnings Record in Q1?
AutoNation (AN - Free Report) is slated to release first-quarter 2022 results on Apr 21, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is pegged at $5.39 per share and $6.63 billion, respectively.
The auto retailer came up with better-than-expected results in the last reported quarter on higher-than-anticipated profits from new and used vehicle sales. In fact, AN posted the seventh consecutive all-time record EPS in fourth-quarter 2021. The company surpassed earnings estimates in the trailing four quarters, with the average being 39.3%. Investors expect AN to maintain its earnings beat streak for the first quarter of 2022 as well. Encouragingly, our model also predicts the same.
The Zacks Consensus Estimate for AutoNation’s first-quarter earnings per share has been revised upward by 7 cents in the past 30 days. The bottom-line projection implies a year-over-year jump of 93.2%. Also, the Zacks Consensus Estimate for revenues suggests a year-over-year uptick of 12.3%.
AutoNation, Inc. Price and EPS Surprise
AutoNation, Inc. price-eps-surprise | AutoNation, Inc. Quote
Earnings Whispers
Our proven model predicts an earnings beat for AutoNation for the to-be-reported quarter, as it has the right combination of the two key ingredients. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: AutoNation has an Earnings ESP of +0.58%. This is because the Most Accurate Estimate is pegged 4 cents above the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: AutoNation currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors to Influence the Results
Courtesy of economic recovery from the pandemic lows and preference for personal mobility, demand for vehicles has been on the rise, which is likely to have aided sales of AutoNation. During the last reported quarter, AutoNation acquired 11 stores and a collision center from Peacock Automotive Group. The auto retailer also completed the acquisition of Priority 1 Automotive Group, which added nine Maryland dealerships to AutoNation’s portfolio. These buyouts are likely to have contributed to AutoNation’s first-quarter 2022 sales.
Even though tight inventory may have played a spoilsport to some extent, the rising average selling price for new and used cars amid supply-demand mismatch is likely to have fueled first-quarter revenues.
AN’s digital platform AutoNation Express stepped up its digitization game, which is expected to have aided sales in the quarter. Increased focus on cost discipline is anticipated to have aided first-quarter margins. Over the past few quarters, the firm’s adjusted selling, general & administrative expenses as a percentage of gross profit have been declining. The metric came in at 57.2% in the last reported quarter, representing a 710-basis point improvement year over year. The trend is expected to have continued in first-quarter 2022 as well.
Key Segmental Predictions
Below we have highlighted chief predictions for AutoNation’s segments. The Zacks Consensus Estimate for total retail vehicle sales for the quarter to be reported is pegged at 149,750 units, indicating an increase from 141,141 in the year-ago period, primarily led by used-vehicle sales growth.
The consensus estimate for used vehicle retail sales stands at 74,078 units, implying an uptick from 71,780 units in first-quarter 2021. The consensus mark for revenues and gross profit from used-vehicle sales is pegged at $2,229 million and $170 million, suggesting growth from the year-ago levels of $1,749 million and $140 million, respectively.
The consensus estimate for new vehicle retail sales stands at 75,672 units, implying an uptick from 69,361 units in first-quarter 2021. The consensus mark for revenues and gross profit from used-vehicle sales is pegged at $3,056 million and $389 million, suggesting growth from the year-ago levels of $2,982 million and $190 million, respectively.
The consensus mark for revenues and gross profits from the Parts and Services segment is pegged at $959 million and $438 million, implying year-over-year growth of 12.7% and 12.6%, respectively. The same for revenues and gross profits from the Finance & Insurance unit stands at $366 million and $391 million, implying growth from 16.9% and 24.9% a year ago, respectively.
Higher year-over-year projected gross profit across all business operations — new and vehicle sales, parts and services, and finance and insurance — is likely to aid the upcoming results.
Other Stocks With Favorable Combination
Here are a few other stocks in the auto space, which, according to our model, also have the right combination of elements to post an earnings beat for the quarter to be reported:
Allison Transmission (ALSN - Free Report) has an Earnings ESP of +10.35% and a Zacks Rank #3. The stock is set to report first-quarter 2022 earnings on Apr 27.
The Zacks Consensus Estimate for Allison’s to-be-reported quarter’s earnings and revenues is pegged at $1.16 per share and $642 million, respectively. Encouragingly, ALSN surpassed earnings estimates in the last four quarters, with an average of 13.4%.
LKQ Corp (LKQ - Free Report) has an Earnings ESP of +0.37% and a Zacks Rank #3. The stock is set to report first-quarter 2022 earnings on Apr 28.
The Zacks Consensus Estimate for LKQ’s to-be-reported quarter’s earnings and revenues is pegged at 91 cents per share and $3.28 billion, respectively. Encouragingly, LKQ surpassed earnings estimates in the last four quarters, with an average of 33.9%.
Cummins, Inc. (CMI - Free Report) has an Earnings ESP of +1.68% and a Zacks Rank #3. The stock is set to report first-quarter 2022 earnings on May 3.
The Zacks Consensus Estimate for Cummins’ to-be-reported quarter’s earnings and revenues is pegged at $3.55 per share and $6.02 billion, respectively. Over the trailing four quarters, CMI surpassed earnings estimates twice for as many misses, with an average surprise of 0.5%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.