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

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AutoNation (AN - Free Report) closed at $113.40 in the latest trading session, marking a -1.45% move from the prior day. This change lagged the S&P 500's 1.46% gain on the day. Elsewhere, the Dow gained 1%, while the tech-heavy Nasdaq lost 0.17%.

Heading into today, shares of the auto retailer had lost 6.19% over the past month, outpacing the Retail-Wholesale sector's loss of 6.74% and the S&P 500's loss of 6.94% in that time.

AutoNation will be looking to display strength as it nears its next earnings release. In that report, analysts expect AutoNation to post earnings of $5.95 per share. This would mark year-over-year growth of 23.19%. Meanwhile, our latest consensus estimate is calling for revenue of $6.87 billion, down 1.59% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $23.20 per share and revenue of $27.58 billion, which would represent changes of +27.89% and +6.71%, respectively, from the prior year.

Any recent changes to analyst estimates for AutoNation should also be noted by investors. Recent revisions tend to reflect the latest 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. 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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 4.08% higher. AutoNation is holding a Zacks Rank of #2 (Buy) right now.

Investors should also note AutoNation's current valuation metrics, including its Forward P/E ratio of 4.96. For comparison, its industry has an average Forward P/E of 5.86, which means AutoNation is trading at a discount to the group.

It is also worth noting that AN currently has a PEG ratio of 0.2. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. AN's industry had an average PEG ratio of 0.42 as of yesterday's close.

The Automotive - Retail and Whole Sales industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 33, putting it in the top 14% 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.

Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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