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

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In the latest trading session, AutoNation (AN - Free Report) closed at $107.41, marking a +1.95% move from the previous day. This move outpaced the S&P 500's daily loss of 0.21%. At the same time, the Dow lost 0.43%, and the tech-heavy Nasdaq gained 0.03%.

Coming into today, shares of the auto retailer had lost 17.27% in the past month. In that same time, the Retail-Wholesale sector lost 9.13%, while the S&P 500 lost 9.7%.

Wall Street will be looking for positivity from AutoNation as it approaches its next earnings report date. The company is expected to report EPS of $6.41, up 25.2% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $6.78 billion, up 6.27% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $24.74 per share and revenue of $27.2 billion. These totals would mark changes of +36.38% and +5.25%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for AutoNation. These revisions help to show the ever-changing nature of near-term business trends. 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. AutoNation is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, AutoNation is holding a Forward P/E ratio of 4.26. For comparison, its industry has an average Forward P/E of 4.67, which means AutoNation is trading at a discount to the group.

Investors should also note that AN has a PEG ratio of 0.61 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Automotive - Retail and Whole Sales stocks are, on average, holding a PEG ratio of 0.56 based on yesterday's closing prices.

The Automotive - Retail and Whole Sales industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 76, which puts it in the top 31% 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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