AN  Autonation Inc.

Exchange

NYSE

Sector

Consumer Durables

Industry

Automotive Aftermarket

Market Cap.

3.98B

Vuru Grade

39.03/100

Current Price

$39.27
+0.37 (+0.95%)

Growth Price

$40.89
Fairly valued

Stability Price

$35.03
Overvalued by 10.79%

Company Metrics

  • P/E 9.29
  • P/S 0.18
  • P/B 1.62
  • EPS 4.23
  • Cash ROIC 6.12%
  • Cash Ratio 0.01
  • Dividend 0 / N/A %
  • Avg. Vol. 1.33M
  • Shares 101.35M
  • Market Cap. 3.98B

Company Description

AutoNation, Inc., through its subsidiaries, operates as an automotive retailer in the United States. It offers various automotive products and services, including new vehicles, used vehicles, parts, automotive repair and maintenance services, and automotive finance and insurance products. The company also provides a range of vehicle maintenance, repair, paint, and collision repair services, such a... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Nevada Children's Cancer Foundation Receives New ProMaster Van as AutoNation ...
PR Newswire (press release) - May 25, 2017
FORT LAUDERDALE, Fla., May 25, 2017 /PRNewswire/ -- AutoNation, Inc. (NYSE: AN), America's largest automotive retailer, is celebrating a record-breaking 11 million vehicles sold by thanking its community partners and customers, those who made this ...
Lucky Texas Customers are Surprised with Free Vehicles as AutoNation ...
PR Newswire (press release) - May 23, 2017
Ft. Lauderdale, Fla., May 23, 2017 /PRNewswire/ -- AutoNation, Inc. (NYSE: AN), America's largest automotive retailer, is celebrating a record-breaking 11 million vehicles sold.
AutoNation: Are Investors Overreacting To Auto-Cycle Peak Fears?
Seeking Alpha - May 16, 2017
AutoNation, Inc. (NYSE:AN) is the largest automotive retailer in the United States. As of December 31, 2016, it owned and operated 371 new vehicle franchises from 260 stores located in the United States, predominantly in major metropolitan markets in ...
The Top Three Holders Of AutoNation, Inc. (AN) - Post Analyst
Brokerages Anticipate AutoNation, Inc. (AN) Will Post Quarterly Sales of $5.6 ... - The Cerbat Gem
AutoNation Celebrates 11 Million Vehicles Sold With Vehicle Donations and ...
PR Newswire (press release) - May 18, 2017
FORT LAUDERDALE, Fla., May 18, 2017 /PRNewswire/ -- AutoNation, Inc. (NYSE: AN), America's largest automotive retailer, is celebrating a record-breaking 11 million vehicles sold.
AutoNation Is Aggressively Expanding Its Footprint
Seeking Alpha - May 15, 2017
I saw that the somewhat unknown but truly outstanding value investor, Allan Mecham, owned AutoNation (NYSE:AN) and I wanted to see if I could figure out why he owned it and whether I would like to own it.
AutoNation Announces Resignation of William "Bill" Berman, President and Chief ...
PR Newswire (press release) - May 15, 2017
FORT LAUDERDALE, Fla., May 15, 2017 /PRNewswire/ -- AutoNation, Inc. (NYSE: AN), America's largest automotive retailer, today announced the resignation of William "Bill" Berman as President and Chief Operating Officer effective today, May 15, 2017.
AutoNation COO Berman resigns - Automotive News (subscription) (blog)
AutoNation Features 2014 Indy 500® Winner Ryan Hunter-Reay And Indy 500 ...
PR Newswire (press release) - May 22, 2017
FORT LAUDERDALE, Fla., May 22, 2017 /PRNewswire/ -- AutoNation, Inc. (NYSE: AN), America's Largest Automotive Retailer, today announced that it has again teamed up with Andretti Autosport's 2014 Indy 500® Champion, Ryan Hunter-Reay and Indy ...
Brent's Place Receives New Chrysler Passenger Van as AutoNation Celebrates 11 ...
PR Newswire (press release) - May 19, 2017
DENVER, May 19, 2017 /PRNewswire/ -- AutoNation, Inc. (NYSE: AN), America's largest automotive retailer, is celebrating a record-breaking 11 million vehicles sold by thanking its community partners and customers, those who made this momentous ...
Buy AutoNation?
Seeking Alpha - May 5, 2017
How important it is to dive in a company' 10K to fully understand where their numbers come from. Highlights of the company's positive growth, supporting what might be a good investment at first sight.
AutoNation: A Huge Disconnect Between Price And Value
Seeking Alpha - May 3, 2017
AutoNation's stock price is the same as it was five years ago. Meanwhile, in the past five years, earnings per share have grown 63%.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for AN to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate AN's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$39.27 Current Price

$40.89 Growth Price (DCF)

Fairly valued


Growth Rate Assumed by Market: -1.16%


Future Free Cash Flow Growth Rate: 1.2%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$35.03 Stability Price (EPV)

Overvalued by 10.79%


Discount Rate: 15.0%

$53.66 Book Price

Undervalued by 36.64%


Poor Cash Return on Invested Capital over the past 5 years

AN has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

AN has only created $6.12 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 156.00M 323.30M 275.90M 259.60M 271.50M
divided by
Invested Capital 3.93B 4.09B 4.44B 4.32B 4.17B
Cash ROIC 3.97% 7.90% 6.21% 6.02% 6.52%

Excellent Return on Equity over the past 5 years

Over the past 5 years, AN has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

AN has generated $18.92 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 316.40M 374.90M 418.70M 442.60M 430.50M
divided by
Stockholders' Equity 1.69B 2.06B 2.07B 2.35B 2.31B
Return on Equity 18.74% 18.18% 20.21% 18.84% 18.63%

Excellent Business Performance over the past 10 years

AN has been able to maintain profitability in good times and bad. This could mean AN has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

AN has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 46.70M 568.00M 294.00M 90.00M 227.30M 156.00M 323.30M 275.90M 259.60M 271.50M

Weak Balance Sheet

AN's financial position is not ideal. The key is to check whether AN is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 32.80M 111.00M 173.70M 95.10M 86.60M 69.70M 69.20M 75.40M 74.10M 64.80M
Current Assets 3.24B 2.55B 2.25B 2.63B 2.68B 3.36B 3.83B 4.00B 4.71B 4.71B
Total Assets 8.48B 6.01B 5.41B 5.97B 6.20B 7.20B 7.91B 8.40B 9.56B 10.06B
Current Liabilities 2.90B 2.46B 1.86B 2.40B 2.46B 3.20B 3.75B 3.88B 5.17B 5.83B
Total Liabilities 5.01B 3.82B 3.10B 3.90B 4.30B 5.51B 5.85B 6.33B 7.21B 7.75B
Stockholder' Equity 3.47B 2.20B 2.30B 2.08B 1.89B 1.69B 2.06B 2.07B 2.35B 2.31B
Current Ratio 1.12 1.04 1.21 1.10 1.09 1.05 1.02 1.03 0.91 0.81
TL-to-TA 0.59 0.63 0.57 0.65 0.69 0.77 0.74 0.75 0.75 0.77

Low or No Reinvestment of Profits over the past 10 years

AN has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to AN operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 3.27B 2.02B 2.22B 2.37B 2.65B 2.96B 3.34B 3.76B 2.70B 3.13B
Retained Earnings Growth - -38.06% 9.79% 6.49% 11.90% 11.95% 12.65% 12.54% -28.05% 15.93%

Highly Competitive Industry over the past 10 years

It's likely that AN is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely AN invests heavily in R&D and Sales, General & Administrative expenses.

Only $0.89 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 278.70M -1.24B 198.00M 226.60M 281.40M 316.40M 374.90M 418.70M 442.60M 430.50M
divided by
Revenue 17.69B 14.13B 10.76B 12.46B 13.83B 15.67B 17.52B 19.11B 20.86B 21.61B
Net Profit Margin 1.58% -8.80% 1.84% 1.82% 2.03% 2.02% 2.14% 2.19% 2.12% 1.99%

Weak Pricing Power over the past 10 years

AN is likely in a highly competitive industry, due to low barriers to entry. It's because of this, that AN has been unable to raise prices and increase their profitability. This puts them in a poor position if inflation becomes an issue, as they would struggle to pass higher costs onto consumers.

Only $16.28 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 2.84B 2.38B 1.93B 2.13B 2.30B 2.49B 2.76B 2.99B 3.26B 3.31B
divided by
Revenue 17.69B 14.13B 10.76B 12.46B 13.83B 15.67B 17.52B 19.11B 20.86B 21.61B
Gross Margin 16.08% 16.84% 17.93% 17.07% 16.66% 15.87% 15.76% 15.64% 15.63% 15.33%

High Capital Intensity over the past 10 years

AN spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

52.93% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 160.20M 117.40M 75.50M 161.80M 149.10M 160.60M 160.80M 209.20M 247.60M 244.50M
divided by
Net Income 278.70M -1.24B 198.00M 226.60M 281.40M 316.40M 374.90M 418.70M 442.60M 430.50M
Capital Expenditure Ratio 57.48% -9.44% 38.13% 71.40% 52.99% 50.76% 42.89% 49.96% 55.94% 56.79%

No Dividend History over the past 10 years

AN has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 200.00M 177.80M 177.30M 158.60M 147.30M 125.80M 123.30M 118.90M 113.90M 103.80M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 15.47 9.45 19.25 28.46 36.87 38.92 49.84 60.80 60.28 48.65
Dividend Yield - - - - - - - - - -

Strong History of Stock Buybacks over the past 10 years

AN has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 200.00M 177.80M 177.30M 158.60M 147.30M 125.80M 123.30M 118.90M 113.90M 103.80M
Stock Bought Back - 12.49% 0.28% 11.79% 7.67% 17.09% 2.03% 3.70% 4.39% 9.73%
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