It has been about a month since the last earnings report for Penske Automotive (PAG Quick QuotePAG - Free Report) . Shares have added about 3.2% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is Penske 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.

Penske Q4 Earnings Miss Estimates, Dividend Hiked

Penske reported fourth-quarter 2023 adjusted earnings of $3.45 per share, which decreased 18% year over year and missed the Zacks Consensus Estimate of $3.66. The company registered net sales of $7.27 billion, surpassing the Zacks Consensus Estimate of $7.19 billion. The top line rose 4% from the year-ago quarter.

Penske’s gross profit in the reported quarter remained flat on a year-over-year basis at $1.18 billion. The operating income contracted 20.8% to $265.7 million. Foreign currency transactions benefited revenues by $130 million and had a negligible impact on net income and earnings per share (EPS).

In the reported quarter, same-store retail units rose 9% year over year to 116,700. Within the Retail Automotive segment, same-store new-vehicle revenues were up 7.6% to $2.97 billion. Same-store used-vehicle revenues decreased 1% to $1.95 billion.

Segmental Performance

In the reported period, revenues in the Retail Automotive segment came in at $6.18 billion, up 4.5% from a year ago and topping our estimate of $5.81 billion. The outperformance resulted from higher-than-expected revenues from new and used vehicles. Gross profit of $1 billion fell 0.6% year over year but came ahead of our estimate of $960.5 million.

Revenues in the Retail Commercial Truck segment decreased 5.2% to $904.8 million and fell short of our estimate of $967 million. Gross profit in the segment was $143.2 million, rising from $138.2 million in the year-earlier quarter figure and topping our expectation of $134.9 million.

The Commercial Vehicle Distribution and Other segment’s revenues in the reported quarter increased 34.7% to $189.4 million and topped our estimate of $148.5 million. Gross profit came in at $42.5 million, up from $36.2 million in the year-ago period and higher than our estimate of $36.5 million.

Financial Tidbits

In the quarter under review, SG&A costs totaled $844.1 million, up 3.5% year over year. As of Dec 31, 2023, Penske had cash and cash equivalents of $96.4 million, down from $106.5 million as of Dec 31, 2022. The long-term debt amounted to $1.42 billion, down from $1.55 billion as of Dec 31, 2022.

During the quarter under discussion, PAG repurchased 0.1 million shares of common stock for $17.6 million. As of Dec 31, 2023, $215.5 million of stock repurchase authorization remained outstanding.

Penske increased dividend by 10% to 87 cents per share, to be paid out on Mar 1, 2024 to shareholders of record as of Feb 15, 2024.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

VGM Scores

At this time, Penske has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Penske has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.