AN  Autonation Inc.

Exchange

NYSE

Sector

Consumer Durables

Industry

Automotive Aftermarket

Market Cap.

4.73B

Vuru Grade

36.27/100

Current Price

$46.83
+0.24 (+0.52%)

Growth Price

$41.03
Overvalued by 12.37%

Stability Price

$35.15
Overvalued by 24.94%

Company Metrics

  • P/E 11.29
  • P/S 0.22
  • P/B 2.03
  • EPS 4.15
  • Cash ROIC 6.12%
  • Cash Ratio 0.01
  • Dividend 0 / 0%
  • Avg. Vol. 975,258.00
  • Shares 101.00M
  • Market Cap. 4.73B

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

Agree To Purchase AutoNation At $41, Earn 7.3% Annualized Using Options
Nasdaq - Feb 24, 2017
Investors eyeing a purchase of AutoNation, Inc. (Symbol: AN) shares, but cautious about paying the going market price of $46.37/share, might benefit from considering selling puts among the alternative strategies at their disposal.
Tax Reform Could Boost AutoNation's EPS By 12% To 25%
Seeking Alpha - Feb 9, 2017
AutoNation is a purely domestic company and would benefit significantly from a reduction in corporate income tax. Even without tax reform, AutoNation is still a good bargain today. Forward earnings per share of $4.53 excluding tax reform gives ...
Option Market: AutoNation Inc Risk Hits A Substantially Lowered Level
CML News - Feb 24, 2017
We're going to look at a proprietary risk rating for the next 30-days built by Capital Market Laboratories (CMLviz) based on a large number of interactions of data points, many of which come directly from the option market for AutoNation Inc (NYSE:AN) .
Earnings Reaction History: AutoNation Inc., 55.6% Follow-Through Indicator, 3 ...
Nasdaq - Feb 3, 2017
AutoNation Inc. ( AN ) is due to issue its quarterly earnings report in the upcoming extended-hours session. Given its history, traders can expect light trading in the issue immediately following its quarterly earnings announcement.
Evercore ISI Downgrades AutoNation Inc. (AN) to Hold
StreetInsider.com - Feb 6, 2017
Evercore ISI downgraded AutoNation Inc. (NYSE: AN) from Buy to Hold with a price target of $53.00. Analyst Michael Montani comments "The AutioNation USA brand extension strategy means fewer franchised acquisitions and more pre-open expense this ...
Analyst Downgrades – AutoNation (NYSE:AN) Stock Gets Downgraded By Evercore ... - Market Exclusive
AutoNation, Inc. (NYSE:AN) has been downgraded to Hold in a statement by ... - Breaking Finance News
AutoNation Inc. (AN) Dips 3.86% for February 03
Equities.com - Feb 3, 2017
Among the S&P 500's biggest fallers on Friday February 03 was AutoNation Inc. (AN). The stock experienced a 3.86% decline to $49.77 with 1.97 million shares changing hands.
AutoNation misses profit, sales expectations - MarketWatch
AutoNation quarterly earnings rise despite pressure on margins - Reuters
AutoNation Inc. Reveals 18% Advance In Q4 Earnings
Nasdaq - Feb 3, 2017
(RTTNews.com) - AutoNation Inc. ( AN ) revealed a profit for its fourth quarter that gained ground compared to the same period last year.
Comparable sales dip at AutoNation
Seeking Alpha - Feb 3, 2017
Comparable sales dip at AutoNation. Feb. 3, 2017 7:23 AM ET |About: AutoNation Inc (AN)|By: Clark Schultz, SA News Editor. AutoNation (NYSE:AN) reports comparable sales fell 0.90% in Q4 to miss the consensus estimate for a 0.40% gain.
AutoNation Reports All-Time Record Quarterly and All-Time Record Full Year EPS - PR Newswire (press release)
Susquehanna Bancshares Inc disclosed AutoNation, Inc. (NYSE:AN), hiking its ... - Breaking Finance News
AutoNation (AN) Q4 Earnings Miss Estimates, Fall Y/Y
Yahoo Finance - Feb 3, 2017
AutoNation Inc. AN is the largest automotive retailer in the U.S. and is about twice the size of its nearest competitor. The company is positioned to benefit from recovery in the auto market, backed by its optimal brand and market mix as well as a ...
AutoNation (AN) Q4 Earnings, Revenues Miss on Estimates - Nasdaq
Earnings Preview: What To Expect From AutoNation On Friday
Forbes - Feb 2, 2017
AutoNation, Inc., incorporated on May 30, 1991, is an automotive retailer in the United States. The Company offers a range of automotive products and services, including new vehicles, used vehicles, parts and service, which includes automotive repair ...
AutoNation, Inc. (AN) stock starts with “Neutral” rating in note to investors ... - BNB Daily (blog)
AutoNation, Inc. (AN) to Release Quarterly Earnings on Friday - Sports Perspectives
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.

$46.83 Current Price

$41.03 Growth Price (DCF)

Overvalued by 12.37%


Growth Rate Assumed by Market: 8.18%


Future Free Cash Flow Growth Rate: 1.2%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$35.15 Stability Price (EPV)

Overvalued by 24.94%


Discount Rate: 15.0%

$53.91 Book Price

Undervalued by 15.13%


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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