AutoNation (AN) closed at $114.18 in the latest trading session, marking a -1.87% move from the prior day. This move lagged the S&P 500’s daily gain of 0.92%. Elsewhere, the Dow gained 0.51%, while the tech-heavy Nasdaq added 0.54%.
Prior to today’s trading, shares of the auto retailer had gained 1.82% over the past month. This has outpaced the Retail-Wholesale sector’s loss of 4.75% and the S&P 500’s loss of 0.85% in that time.
AutoNation will be looking to display strength as it nears its next earnings release. On that day, AutoNation is projected to report earnings of $4.99 per share, which would represent year-over-year growth of 105.35%. Our most recent consensus estimate is calling for quarterly revenue of $6.44 billion, up 11.26% from the year-ago period.
It is also important to note the recent changes to analyst estimates for AutoNation. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 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 has moved 1.21% higher. AutoNation currently has a Zacks Rank of #1 (Strong Buy).
Valuation is also important, so investors should note that AutoNation has a Forward P/E ratio of 6.51 right now. For comparison, its industry has an average Forward P/E of 7.71, which means AutoNation is trading at a discount to the group.
Also, we should mention that AN has a PEG ratio of 0.28. 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. The Automotive – Retail and Whole Sales was holding an average PEG ratio of 0.38 at yesterday’s closing price.
The Automotive – Retail and Whole Sales industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 6, putting it in the top 3% 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.
To follow AN in the coming trading sessions, be sure to utilize Zacks.com.
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