Start here if you're new
what it is
AutoNation sells new and used cars, fixes them, and arranges financing through 325 franchised dealerships across the U.S.
how it gets paid
Last year Autonation made $27.6B in revenue. new vehicle sales was the main engine at $13.5B, or 49% of sales.
why it's growing
Revenue grew 3.2% last year. The latest quarter showed AutoNation still has pricing and execution discipline.
what just happened
Last quarter EPS came in at $5.08, beating the $4.75 estimate by 6.95%.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
55/100 earnings predictability — expect surprises
10.5x trailing p/e — the market's not buying it — or you found a deal
12.5% return on capital — nothing to write home about
xvary composite: 60/100 — average
What they do
AutoNation sells new and used cars, fixes them, and arranges financing through 325 franchised dealerships across the U.S.
Scale matters here. AutoNation runs 325 franchised dealerships across 243 locations, plus 52 collision centers and 24 used vehicle stores, so you are buying local reach with national purchasing power. Parts and service are only 17% of 2024 revenue, but they keep customers coming back after the car sale, which makes the business stickier than a one-time vehicle handoff.
How they make money
$27.6B
annual revenue · their business grew +3.2% last year
new vehicle sales
$13.5B
used vehicle sales
$8.0B
parts and service
$4.7B
finance and other
$1.4B
The products that matter
retails new vehicles
New Vehicle Sales
$13.5B · 51.6% of revenue
it's the largest segment at $13.5B, but it is also where price competition shows up first when inventories build and promotions come back.
top line driver
retails used vehicles
Used Vehicle Sales
$8.0B · 30.5% of revenue
this $8.0B segment is 30.5% of revenue. used cars matter because they can cushion profitability when new vehicle economics get tighter.
cycle lever
repairs and maintenance
Parts & Service
$4.7B · 17.9% of revenue
it's only 17.9% of revenue, but $4.7B of service work is the closest thing you have here to recurring demand. that's why investors care about mix, not just volume.
stability engine
Key numbers
10.5x
cheap multiple
P/E → stock price versus past profit → so what: you are paying 10.5 years of trailing earnings, versus 14% upside to the $237 18-month target.
$4.8B
long debt
Debt equals 39% of capital, so leverage matters more here than the 0.85 beta suggests if auto sales soften.
12.5%
return capital
Return on capital → profit from each dollar invested in the business → so what: AutoNation turns every $1 into $0.125 of operating profit.
5.5%
operating margin
Operating margin → profit after running the business, before interest and taxes → so what: this is a scale business with very little room for pricing mistakes.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 55 / 100
- long-term debt $4.8B (39% of capital)
- net profit margin 2.7% — keeps 3 cents of every dollar in revenue
- return on equity 22% — $0.22 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in AN 3 years ago → it's now worth $19,140.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
Last quarter EPS came in at $5.08, beating the $4.75 estimate by 6.95%.
The latest quarter showed AutoNation still has pricing and execution discipline, even after EPS fell from $22.98 in 2023 to $19.90 in 2025. Gross margin held at 18.0%, which matters in a business with a 2.7% net margin.
$20.7B
revenue
$5.08
eps
18.0%
gross margin
the number that mattered
The key number was the 6.95% EPS beat, because in a low-margin dealer business, small execution wins still move the story.
-
investors in autonation had good reason to smile last year.
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to wit, shares of the country’s second-largest auto dealer jumped nearly 22% in price in 2025, outperforming the benchmark s&p 500 index and all six other traditional brick-andmortar vehicle sellers within the institutional data over the 12-month stretch.
-
last year, an shares trounced those of lithia motors (-7%)), the nation’s leading auto dealer (ranked by overall domestic sales).the auto dealer appears to have largely side stepped some key challenges that plagued others in 2025. importantly, after becoming a direct auto lender (through the late-2022 acquisition of cig financial), autonation has ceded the riskier, sub-prime segment of the car financing market. against the backdrop of rising loan delinquencies last year, especially within sub-prime, the company’s focus on more credit-worthy car buyers seems to be paying off. it is also autonation ultimately passed on a major overseas acquisition (inchcape in the u.k.), which has arguably been a disappointment for that franchise’s new owner (group 1). a wide range of vehicle offerings should help limit the impact of current and future tariffs on autonation’s sales. to wit, management recently envisioned a scenario in which import duties lead to a cross-shopping effect, with a tariff-induced rise in foreign car prices prompting car buyers to turn their focus to domestically produced vehicles.
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already, u.s. automakers recently represented about 30% of the new cars and light trucks that autonation sells.
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we do have some concerns here.among them is the growing risk of greater discounting, as dealer inventories of luxury vehicles, in particular, have recently reached fairly high levels. we do also worry that autonation’s investments in electric-vehicle charging infrastructure and service capabilities won’t pay off.
source: company earnings report, 2026
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What could go wrong
the #1 risk is margin compression from vehicle discounting.
high
inventory-led price pressure
luxury vehicle inventory has built up. more cars on the lot usually means more discounting, and AutoNation only keeps a 2.6% net margin to begin with.
new and used vehicles are $21.5B of revenue, or 82.1% of the business.
med
consumer and credit sensitivity
you are not taking sub-prime blowup risk in its ugliest form, but you are still exposed to rates, affordability, and delinquency trends because cars are financed purchases for many buyers.
a weaker consumer shows up fast in unit demand, financing income, and used-car pricing.
med
buyback quality risk
recent EPS growth has outrun revenue growth because share count is falling. that's good while operations stay firm. if margins soften, the same buyback story starts to look like cover rather than strength.
full-year 2025 EPS rose 14% while annual revenue growth ran at 3.2%.
med
capital allocation under debt
the balance sheet is fine, not pristine. buybacks, store investments, and EV-related spending all look smarter when profits hold up. they look a lot less elegant when the cycle turns against you.
$4.8B of long-term debt equals 39% of capital.
new and used vehicles account for $21.5B, or 82.1% of revenue. if pricing slips and the 2.3% quarterly margin becomes the new normal, the multiple stays cheap for a reason.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
quarterly margin
the latest quarter came in at 2.3%. in a 2.6% net-margin business, even a few tenths of a point matter.
risk
luxury inventory
watch high-end inventory in particular. excess supply is usually the first draft of future discounting.
trend
parts & service mix
this $4.7B segment is the steadier piece of the business. if its share of profit rises, earnings quality improves even if unit sales do not.
calendar
buyback dependence
each quarter, keep asking the same question: is EPS growth still outrunning revenue because the business improved, or because the share count got smaller.
Analyst rankings
short-term outlook
average
momentum score 3. in human-speak, the stock is not flashing a strong short-term signal either way.
risk profile
average
stability score 3. that's a middle-of-the-road risk read — not especially safe, not especially wild.
chart momentum
top 20%
technical score 2. analysts expect above-average price performance in the year ahead. in human-speak: the chart still looks healthy.
earnings predictability
55 / 100
profit swings are harder to forecast here than in steadier businesses. you should expect some noise.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 249 buyers vs. 220 sellers in 3q2025. total institutional holdings: 25.5M shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$164
$309
$209
current price
$237
target midpoint · +14% from current · 3-5yr high: $255 (+20% · 5% ann'l return)
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