A month has gone by since the last earnings report for Asbury Automotive Group (ABG Quick QuoteABG - Free Report) . Shares have added about 12% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Asbury Automotive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Asbury Q3 Earnings & Revenues Miss Estimates, Fall Y/Y

Asbury reported third-quarter 2023 adjusted earnings of $8.12 per share, which decreased 12% year over year and missed the Zacks Consensus Estimate of $8.44 per share on lower-than-anticipated sales across new-vehicle, finance and insurance business and parts and service business segments.

In the reported quarter, revenues amounted to $3,666.2 million, down 5% year over year. The top line also missed the Zacks Consensus Estimate of $3,722 million.

Segment Details

In the quarter, new-vehicle revenues rose 3% year over year to $1,861.9 million, missing the Zacks Consensus Estimate of $1,897 million. Gross profit from the segment came in at $168 million, contracting 16.4% from the prior-year quarter and lagging the Zacks Consensus Estimate of $171 million.

Used-vehicle revenues slid 16% from the year-ago figure to $1,111.7 million, surpassing the Zacks Consensus Estimate of $1,097 million. Gross profit from the segment came in at $62 million, which fell 24.4% and missed the Zacks Consensus Estimate of $69 million.

Net revenues in the finance and insurance business amounted to $166.1 million, down 17% from the year-ago quarter and lagging the Zacks Consensus Estimate of $169 million. Gross profit was $152 million, declining 18.7% year over year but outpacing the Zacks Consensus Estimate of $142 million.

Revenues from the parts and service business fell 2% from the prior-year quarter to $526.5 million and missed the Zacks Consensus Estimate of $551 million. Gross profit from this segment came in at $291 million, falling 2.3% year over year and missing the Zacks Consensus Estimate of $304 million.

Other Tidbits

Adjusted selling, general & administrative (SG&A) expenses as a percentage of gross profit rose to 58.4%, marking an increase of 136 basis points year over year. Asbury sold over 11,600 vehicles, an all-time record high, through the “end-to-end” online sales platform Clicklane.

As of Sep 30, 2023, the company had cash and cash equivalents of $41.6 million, down from $235.3 million on Dec 31, 2022. It had a long-term debt of $3,222.3 million as of Sep 30, 2023, down from $3,301.2 million on Dec 31, 2022.

During the quarter under review, Asbury did not repurchase shares. On Sep 30, 2023, ABG had $250 million in share repurchase authorization remaining.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

At this time, Asbury Automotive has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Asbury Automotive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.